Tom Dunlap, a Riverkeeper with the James River Association, looks over Swift Creek where toxic leachate from the Shoosmith Landfill is leaking in June 2026. (Photo by Shannon Heckt/Virginia Mercury)
The Virginia General Assembly allocated $10.6 million in the two-year budget lawmakers passed this week for the Department of Environmental Quality to help contain toxic leachate spilling from the bankrupt Shoosmith Landfill in Chesterfield County.
The emergency funds will be used “to prevent it from becoming a catastrophe”, according the Sen. Glen Sturtevant, R-Chesterfield.
It represents a fraction of the $173 million needed to fully close down the landfill located off of Route 10 in Chester. The landfill, which has not taken in new trash since 2022 and whose owners filed for bankruptcy in 2025, reportedly generates about 50,000 gallons of leachate a day, a toxic wastewater made up of runoff from the garbage in the landfill.
View of Shoosmith Landfill through trees surrounding a nearby neighborhood along Swift Creek. June 2026. (Photo by Shannon Heckt/Virginia Mercury)
The creek flows into the Appomattox River and eventually into the James River at Hopewell – where drinking water is collected. Tom Dunlap, a riverkeeper with the James River Association, emphasized that if the leachate continues flowing into the environment it could lead to a major disaster, impacting clean drinking water and healthy streams for wildlife.
“You have to treat that discharged waste fluid to protect the environment,” Dunlap said. “It can be laden with all sorts of things from heavy metals to PFAS chemicals, and on and on. To have that leachate wind up directly in the environment is one of the worst case scenarios that we could be experiencing.”
The leachate is part of normal operations when managing a landfill, but must be treated before being discharged into wastewater treatment systems. In 2018, the county board of supervisors denied a request to expand the landfill by including a lined disposal cell in a nearby rock quarry.
Supervisors said the disposal of the wastewater below the water table could pose serious health and safety risks for residents.
The landfill has a history of improperly managing the leachate from the facility.
Chesterfield County reported that between 2019 and 2023, elevated levels of ammonia were found in the wastewater treatment plant that were traced back to Shoosmith. The landfill wasn’t properly treating the leachate it was discharging into the municipal system, an investigation found, which is a violation of its permit and the Clean Water Act.
This led the county to suspend Shoosmith’s permit to discharge the leachate into the county system; the liquid had to then be hauled offsite to be disposed of.
When filing for bankruptcy, DEQ approved the surety bonds from the facility’s owners to the tune of $19 million. This money was earmarked for the bankruptcy trustee to oversee the continued clean up of the leachate. In a May 26 letter to DEQ, the senator asked what could be done to make sure taxpayers are not left holding the bag to close this private facility.
Local residents in the surrounding neighborhoods have warned for years that the leachate has been getting into streams and odors have been permeating from the landfill.
A group called Chesterfield Citizens for Responsible Government said that the $10.6 million in state funding is not enough to cover the environmental and infrastructure needs laid out in the bankruptcy filings and engineers budget report for the closure of the landfill.
“These are not theoretical concerns. They are documented operational deficiencies at a landfill located adjacent to critical waterways. Immediate action is needed to protect public health, groundwater, and the environment,” the group said in a statement.
The James River Association estimates that about $50 million is needed over the next two years to establish an on-site leachate and treatment facility to slow the spread into the local environment.
“That engineering report cited elevated temperatures and all the knock-on effects of that which includes potential gases that are coming out of it, concerns with the stability of the landfill overall, identifying some of the more rapid-than-expected subsidence and collapses in the landfill,” among other concerns, Dunlap said.
Sturtevant said that the $10 million is just the first step and that the state – alongside the EPA and local officials – are evaluating other revenue streams to help shut down the landfill and manage the leachate before it gets too dangerous.
“This allows the federal, state and local folks the time to develop a plan to stop the leachate to prevent it from becoming a catastrophe, which is where it was headed, because they told us we’re gonna run out of money as soon as August,” Sturtevant said.
The bipartisan delegation of lawmakers that represent the Chesterfield area have been engaging with DEQ and Secretary of Natural and Historic Resources David Bulova on how to protect residents in the interim.
They are also considering how to claw back more funds from the company that abandoned the landfill when bankruptcy was filed.
“It would appear that there were a lot of things that failed along the way, and we have these governmental rules and regulations and agencies in place for the purpose of not allowing that to happen,” Sturtevant said. “So it’s going to require some legislative changes to make sure that there’s not an opportunity for this kind of thing to happen again.”
Map of potential lease site locations for offshore mineral mining. (Image by the Bureau of Ocean Energy Management)
The Bureau of Ocean Energy Management has pitched the possibility of leasing areas of the outer continental shelf off Virginia’s shores for mineral mining. Over the next month, the agency will seek comments from seabed mining industries interested in leasing portions of the coast.
The move is part of President Donald Trump’s effort to increase domestic production of minerals, which are needed for the production of electronics and defense materials.
“Virginia’s offshore mineral resources present a pathway to lessen foreign dependence and reinforce America’s strategic position by establishing secure domestic supply chains,” BOEM Acting Director Matt Diacona said in a statement.
The area that is under consideration for the lease sale is a massive swath next to the Eastern Shore that the Southern Environmental Law Center noted is larger than the state of Delaware.
The entire zone under consideration would not be leased, but if the mining industry shows interest in extracting minerals off the coast, BOEM would then identify areas that could be available for a lease. From there, environmental tests and potential impacts would be analyzed before a lease is granted.
The SELC and Environment Virginia quickly condemned the idea of allowing private companies to conduct industrial dredging to remove large amounts of sediment from the ocean floor with heavy machinery. Both groups cited the major environmental risks it could pose.
“From dolphins breaching the waves to seabirds soaring above our heads, a visit to Virginia’s coast is a reminder of the vibrant ecosystems we are lucky enough to have right over the horizon. Ripping up vast swaths of the seafloor puts this ocean heritage at risk,” said Elly Wilson, the state director of Environment Virginia.
Virginia has not conducted offshore mineral mining before. The SELC is gearing up to fight the potential lease and likened it to proposals for offshore drilling.
Following 2015 and 2018 proposals by BOEM to offer offshore leases for oil and gas production, the Virginia General Assembly passed a law in 2020 banning the permitting and leasing of seabeds within 50 miles of the commonwealth’s shores for oil and gas production. But that law still allows for mineral mining.
“This beloved public resource belongs to the people, not private, extractive industry. Opening Virginia’s federal waters to seabed mining would put countless essential resources at risk, and that’s not a risk we can or should take,” said Megan Huynh with SELC’s wetlands and coasts program.
Environment Virginia suggested that mining companies would be interested in heavy mineral sands in the deep water locations and phosphorites in the shallower waters.
The United States Geological Survey states that “titanium, zirconium, and rare earth elements, needed to manufacture, for example, modern electronics for consumer and defense applications” are commonly found in those heavy mineral sands.
The nation relies on imports of these minerals from foreign countries across the globe, which the Trump administration wants to end..
A public comment period on the potential interest in this mining effort will be open on the Federal Register website until July 23.
A coal chute in Wise County, Va. (Photo by Sarah Vogelsong/Virginia Mercury)
If virtue signaling has a Trump-era corollary, we might call it vice signaling. That’s what President Donald Trump’s most recent package of subsidies for the coal industry looks like: it infuriates the environmentalists he despises and thereby delivers a little dopamine hit to the president’s base, while accomplishing nothing meaningful for the industry or the nation’s energy supply.
On the other hand, the administration’s policy moves on energy are definitely hurting the clean technologies that Virginia needs to reach its zero-carbon electricity goals and lower rates for residents.
Browbeating Republicans in Congress to terminate wind and solar tax credits caused many renewable energy projects to get canceled across the U.S., wiping out $16 billion of clean energy investments; other projects have been blocked or lost grant funding.
Unable to stop offshore wind by any other means, the administration has even resorted to paying developers to abandon leases, with payments totaling more than $2.5 billion.
This mischief is hurting American consumers, and nowhere is that clearer than in Virginia. Our need for massively more power to feed the data center industry makes us especially vulnerable to the effects of Trump’s monkeying around with the energy markets. With less low-cost wind and solar available to buy, our utilities have to burn more high-cost coal. Our rates go up, and so does pollution.
The irony is that even Virginia Republicans don’t champion coal anymore, having thrown it over for cheaper and cleaner-burning fracked gas. Four years ago, then-Gov. Glenn Youngkin’s energy plan touted what he called an all-of-the-above strategy that was mainly focused on fossil gas. About the only time the plan mentioned coal was to note that it had fallen to only 4% of Virginia’s electricity generation.
Republicans here still rise to the defense of one coal plant, Dominion Energy’s Virginia City Hybrid Energy Center (VCHEC) in Wise County. But that’s in spite of the cost, not because of it.
Last time we looked, VCHEC was losing millions of dollars annually – money that comes out of customer pockets. Legislators defend it only because the jobs it provides and the local taxes it pays keep Wise County afloat.
This importance to Southwest Virginia earned VCHEC special treatment in the 2020 Virginia Clean Economy Act (VCEA), which aimed to slash both carbon and costs quickly by forcing the closure of Dominion’s other coal and oil-fired generation. Legally, VCHEC is allowed to stick around until 2045, though few people expected it would survive market realities that long.
In spite of its poor economics, however, coal use has surged in Virginia and nationwide as demand from data centers makes utilities scramble to produce every possible electron. If you don’t have enough cheap renewable energy, you have to use whatever you’ve got, never mind the cost.
Five years ago, Dominion expected to run VCHEC only 15.5% of the time in 2024, less than 11% of the time in 2025, and only a little more than 6% by 2030. Instead, the plant is generating more this year than it has at any time this decade.
The only other large-scale coal plant still operational in Virginia, the Clover coal plant co-owned by Dominion and Old Dominion Electric Cooperative, puts out well under half the electricity it did ten years ago, generating mainly during summer heatwaves and winter cold spells. But it too runs more often now than it did in the first few years of this decade.
Dominion also operates the Mount Storm coal plant in West Virginia. It serves Virginia customers, but its location outside Virginia means the VCEA didn’t require its closure.
Appalachian Power operates coal plants in West Virginia, too, producing power for its residents in that state as well as Southwest Virginia.
The lousy economics of coal mean all these plants generate significantly less power than they used to – but, again, more than they did just three or four years ago, thanks to the demand pressure of data centers. (Well, that and a Trump-style insistence by West Virginia regulators that utilities run their coal plants most of the time, no matter how much it hurts consumers).
The Trump administration is determined to make matters even worse.
Since resuming office last year, Trump has ordered the Department of Defense to buy power from coal plants for its military installations. His Department of Energy has ordered units to keep operating at five coal plants that were about to close because they lose money. His Environmental Protection Agency is loosening pollution standards for coal plants to save them money.
In February the Energy Department announced it would spend $175 million on six projects to extend the life of coal plants in West Virginia, Ohio, North Carolina and Kentucky. The federally-owned Tennessee Valley Authority announced it would keep coal units open at two power plants that were previously slated for closure.
Then, in June, the Energy Department announced another $500 million in coal spending, including $425 million for a bunch more plant upgrades and a $75 million subsidy for a coal export terminal.
Most recently, the department issued plans to throw $350 million at four more coal projects, including restarting a closed plant in Maryland and subsidizing construction of two new plants, one at Mt. Storm.
Some of this spending will keep old plants limping along; some of it smells of grift. One of the proposed new coal plants getting an $18 million contribution from federal taxpayers is the project of a MAGA activist with no energy industry experience.
Indeed, the idea of propping up last century’s technology to build an inefficient industrial plant that won’t ever make money has a distinctly retro vibe, reminiscent of the Soviet Union in its heyday. The problem with Trump‘s vision is that since these money-losing plants couldn’t be completed before his term expires, no self-respecting capitalist will build them.
Trump’s vice signaling is having its intended effect in one respect, though: environmentalists hate it. So, for that matter, do economists and grid experts.
One grid expert I spoke with, Mike Jacobs, a senior manager at the Union of Concerned Scientists, noted that “if the goal was to mine more coal and send more of it up a smokestack, it would make more sense to subsidize coal purchases directly.” Building a coal plant, he said, is “a vanity project.”
What Trump isn’t accomplishing for coal, however, Big Tech is.
Data centers’ demand for power, coupled with Trump’s stifling of the renewable energy sector, keeps coal plants belching along and drives up electricity costs for everyone. That these companies have a long history of virtue signaling with sustainability promises they haven’t met is just its own kind of irony.
By Nathaniel Cline, Shannon Heckt, Charlotte Rene Woods, Samantha Willis Virginia Mercury
Members of Virginia’s Senate Finance and Appropriations Committee speak with the press in the Capitol Rotunda on June 22, 2026. The legislature advanced a $205 billion, two-year spending plan the same day. (Photo by Charlotte Rene Woods/Virignia Mercury)
On Monday, Virginia legislators approved a two-year, $205 billion budget proposal to fund healthcare and public education, provide 4% teacher raises and a 3.5% pay bump to state employees, establish a retail weed marketplace and hedge against decreased federal dollars.
The spending plan also includes a provision to tax data centers for their energy consumption, which is slated to generate a maximum of $600 million each year but doesn’t include the environmental standards the House of Delegates wanted to impose on the industry or the end of the sales tax exemption that the Senate sought.
Senate Finance Committee chair Louise Lucas, D-Portsmouth, said after her chamber’s morning session that she “didn’t love” the data center compromise and framed it as a necessity — but not the final solution.
“I would have preferred another method, but we had to get a budget. We were not going to let the government be shut down, and so this was a good start,” Lucas said.
“This is a compromise proposal — one my administration helped craft — and it builds a strong foundation for further discussions about the future of this industry in Virginia on issues like environmental and community impact,” Gov. Abigail Spanberger said of the data center provision in a statement.
The Senate passed the budget proposal 23-16 vote, while the House advanced it 71-22.
With both chambers finally on the same page after months of gridlock over data centers, the plan will now be reviewed by Spanberger. She can sign it as-is, recommend changes or veto line items. The whole process must be finalized by July 1, when the new budget will take effect.
Here are the key priorities addressed by the spending plan.
Data centers
The amended budget proposal creates an energy consumption tax for data centers which totals $.011 per kilowatt hour used per month.
The state will collect up to $600 million a year from this new tax, according to budget language. Any funds collected over that cap would be put into a fund and given back to data centers at the end of each fiscal year.
This is only a fraction of what the state could have made if they had ended the sales and use tax exemption, but, after months of arguing, lawmakers ultimately didn’t agree to that measure. Spanberger supported keeping the exemption in place through the end of the agreement’s term in 2035.
Additionally, language was put into the budget to direct the Department of Environmental Quality to study the groundwater impacts of non-closed loop data centers, which use millions of gallons of water each year.
DEQ will locate “cooling water scarcity areas” where the use of potable water for computer cooling systems could be detrimental to surrounding areas’ water quality and availability.
The department will have until July 2027 to create regulations for the scarcity areas. After they are developed, future data centers in that area will be required to “use air cooling, closed loop cooling systems, or more efficient cooling systems that become available.”
After July 1, 2027, data centers in the Eastern Groundwater Management Area will have to “use air cooling systems, 100% recycled water and/or stormwater for cooling, or use a closed loop system.” A study will be released in October 2026 on how to retrofit existing data centers in those areas to align with the new regulations.
Some Republican lawmakers characterized the measure as inconsistent.
“The budget does not create one strong statewide water usage standard for data centers. Some parts of Virginia get stronger protections and other parts get weaker protection or no protection at all,” said Sen. Glen Sturtevant, R-Chesterfield. “That should concern every locality that is concerned about becoming the next target for a massive data center.”
Budget language also directs DEQ to put in place noise abatement regulations for data centers before the end of 2029. The department will determine the lowest possible noise level for data centers and make it the standard starting in 2030.
After that date, facilities who violate the noise standard will face a fine of $32,500 per day.
“The noise issues are some of the things we hear the most from people that live next to data centers,” said Sen. Scott Surovell, D-Fairfax, whose district contains dozens of data centers. “Water is a rising concern, especially for any data centers that are gonna be put east of I-95, where we already have a real problem with our declining aquifer.”
Lucas told reporters that this is not the end of the conversation about doing away with the sales and use tax exemption, and that a study group will look closer at the issue and provide a report on their findings in November.
Health and human services
Overall, the pending budget will earmark $158.3 million in the state’s general fund for fiscal year 2027 and $245.1 million in 2028 for healthcare and social services.
The money was set aside both for healthcare and social services the state typically handles along with support to comply with new federal mandates and partially plug holes created by federal funding shortfalls.
As thousands of Virginians have fallen off Affordable Care Act health insurance this year, Virginia’s new budget entails $150 million to support a state-level version of the expired federal assistance for people between 138% and 250% of the federal poverty level.
Sen. Danica Roem, D-Manassas, a former journalist and restaurant worker, described the difficulty of living uninsured for two years in a floor speech on Monday.
“I don’t want anyone to live like that,” she said.
She added that the budget “puts major money” into making sure that the state is “taking care” of people.
Sen. Danica Roem, D-Prince William, speaks on the Senate floor during the special budget session on June 22, 2026. (Photo by Charlotte Rene Woods/Virginia Mercury)
The plan calls for $3.5 million to determine ways the state can ensure eligible people remain on Medicaid amid forthcoming eligibility requirement shifts and additional verification work.
Virginia’s roughly 850,000 Supplemental Nutrition Assistance Program beneficiaries went without their food stamps last fall during the federal shutdown. And due to a reconciliation bill Congress passed last summer, states like Virginia are attempting to reduce their error rates.
State lawmakers have designated $135 million to handle SNAP, should the error rate not fall to the required 6% by the end of the calendar year.
Sometimes SNAP households are overpaid or underpaid because of paperwork mistakes by government staff or outdated information from beneficiaries. Work in social service departments is already underway to reduce error rates.
Free clinics will receive $20 million in state funding over the next two years while federally qualified health centers will get $10 million in that time.
While federally qualified health centers offer sliding scale fees for low-income patients, free clinics are also a resource for uninsured patients. Both entities have been bracing for additional clients as Virginians lose their ACA or Medicaid insurance.
A little over $1 million is allocated to help local health departments statewide handle rent increases. The regional centers help fill healthcare access gaps and are often tailored to the local communities they serve.
As federal dollars for HIV/AIDS care are slashed, the state budget also contains over $26 million for that specific type of healthcare over the next two years. Staying on top of medication is critical in preventing the spread of the disease.
Education
Under the newly approved budget proposal, K-12 education funding would increase by $1.4 billion, including a 4% increase for teachers in each of the next two years.
Lawmakers propose $590 million for rebenchmarking, declining enrollment, and high-need groups, including $28.9 million for at-risk and $148.4 million for special education students.
Also included: $500,000 for grants to help schools purchase Automated External Defibrillators (AEDs) and implement cardiac emergency response plans.
In higher education, the budget proposes restoring funding for affordable access and tuition moderation, as well as expanding nursing programs at several public universities. The Internships Virginia (InVA) initiative to provide paid internships for postsecondary students would also be funded.
To support educational infrastructure, lawmakers also agreed to expand the authority to allow all localities to use a 1% sales tax to pay for construction costs, contingent on a referendum that must pass in each jurisdiction. The language also permits jurisdictions in Northern Virginia to use the funds for transportation projects to address public transit needs.
Tax deductions
Taxpayers will be able to keep a bit more of their cash, as the new budget increases the standard income tax deduction from $8,750 for single filers and $17,500 for joint filers to $9,200 and $18,400 in 2027 and $9,300 and $18,600 in 2028.
RGGI/environment
A budget amendment was added into the conference report that would divert 45% of the funds earned from the Regional Greenhouse Gas Initiative back to ratepayers.
The funds come from carbon credit sales, which utilities must purchase if they want to burn carbon-based fuels sources that release emissions. Those costs are then passed down to utility customers.
When former Gov. Glenn Youngkin removed the state from the agreement in 2021, it cost about $4 a month on the average residential customer’s bill. Recently, Dominion Energy filed for the “RGGI Rider” to be added back to monthly bills as mandated by a law to rejoin the agreement, signed by Spanberger in recent weeks.
Dominion is required to begin purchasing from the carbon credit auction in July but the charge to customers won’t begin until March should the State Corporation Commission approve the application by the utility. This will lead to an increased charge of $10-$13 monthly.
The state previously earned about $800 million from the RGGI funds that had to go towards community flood preparedness projects and low-income energy efficiency projects. The new budget language includes the rebate for customers, which would put money back in wallets but detract from the funds for flood and efficiency projects.
The rebate will not apply to co-op utility customers.
Housing
While a handful of housing bills passed the 2026 session and have since been signed into law, the new spending plan includes measures to ensure bills with fiscal impacts get off the ground.
The state budget proposal directs $60 million overall for housing initiatives, $40 million of which will go to the state’s Housing Trust Fund and $20 million that will go towards a mixed-income housing pilot program.
Additionally, lawmakers set aside $11.5 million for the Virginia Eviction Reduction Program and $10 million for the Clean Energy Innovation Bank.
Cannabis
Spanberger and lawmakers announced June 16 a reworked proposal for a retail cannabis marketplace that included key compromises between legislators’ and the governor’s visions. The marketplace is set to launch July 1, 2027 and will be limited to 350 stores statewide.
State sales tax on retail weed will be 6% at launch and will increase to 8% in 2029. Localities also have the option to add an additional tax of 1 to 3.5%.
Because lawmakers added a Part 5 amendment, the market will be permanently established in the state.
The new framework includes a $250 public consumption civil penalty that will not take effect until 2027.
“We had serious concerns about creating extreme new penalties that would not have meaningfully reduced the illicit market,” Sen. Lashrecse Aird, D-Henrico, said at a press conference announcing the framework last week.
“But we believe this final framework strikes the right balance for enforcement mechanisms, but also in accountability, but also not harming those who just choose to participate in the market.”
Child care
The budget sets aside $137.6 million for the state-subsidized child care program slots, which will be devoted to families making 85% or less of the state median income.
This follows legislation carried by Del. Briana Sewell, D-Prince Wiliam, requiring the state education department to update how it calculates the cost of childcare for Virginia families. A majority of Virginia parents and employers say child care costs are prohibitive.
Spanberger signed the bill into law last month.
A new cost-sharing program for child care will be funded through the budget, with lawmakers allocating $25 million for the initiative to spread the price of child care between families, employers and the state.
Transportation
Lawmakers included $153 million in the budget for additional operating assistance for the Washington Metropolitan Area Transit Authority, or Metro, with the caveat that Metro must produce a 20-year capital plan and annual performance reports.
The action comes as inflation has driven up the costs of operating transit services.
Lawmakers also proposed directing the secretary of transportation to evaluate options, including public-private partnerships, to accelerate large-scale improvements to the I-81 corridor.
The legislature allocated $7 million for the Route 460 Phase IIA Finish Grade Project and directed stakeholder engagement to prioritize improvements along the U.S. Route 220 corridor.
The budget also directs the state to identify federal funds to support rural electric-vehicle charging infrastructure and provides $500,000 to continue developing Advanced Air Aviation Test Sites to enable advanced air mobility.
What’s next
The proposal will now head to Spanberger, who said it contained “a lot to be proud of” in a Monday afternoon statement.
“Today, the General Assembly has moved forward with a budget proposal — and that means we are keeping our government open and delivering for the 8.8 million people who call our Commonwealth home,” she added.
A view from inside the Virginia House of Delegates chamber on June 22, 2026. (Photo by Nathaniel Cline/Virginia Mercury)
Interior of a modern data center. (Photo by Imaginima/Getty Images)
About one-third of the state of Virginia is under extreme drought conditions, according to the U.S. Drought Monitor, and Gov. Abigail Spanberger is urging citizens to conserve water. So when local water authorities implement restrictions on water use, are there specific carve outs and rules for data centers, which use hundreds of thousands of gallons of water to cool their computer systems?
No. Across multiple localities, they’re treated the same as all other commercial, industrial and residential customers, state and local officials revealed.
The Department of Environmental Quality is responsible for permitting the groundwater withdrawal for public water authorities. Once that permit is granted it is up to each authority to manage their water use and limit customers as needed, based on the weather conditions.
“Any of the permittees that are withdrawing are very cognizant of what they’re pulling out,” Weedon Cloe, manager of the Office of Water Supply at DEQ, said. “They have the limits and those limits are baked in during specific times of the year to ensure that the resource is not depleted.”
There are provisions in the drought assessment and response plan that allow DEQ’s director to alter those permits in extreme circumstances. Cloe said that the department is reviewing those procedures, since the state is experiencing the worst drought they’ve seen in decades.
Virginia hasn’t been this dry since 2002, when the extreme conditions triggered new standards.
“The entire water supply program came (from) that drought. It was severe. It was like a huge swath through the center of the state running north south,” Cloe said.
There are three main stages of drought that are declared by DEQ, which help localities decide on what water restrictions to implement.
Under a drought watch, the state agency recommends localities minimize nonessential water use and to get a contingency plan in place.
In the drought warning category, officials recommend local leaders to start voluntary water restrictions and aggressively identify any leaks or repairs needed.
Once a drought emergency is declared, mandatory restrictions are put in place and if water customers don’t curb inessential water like irrigation, washing paved surfaces, or filling up pools, they could be fined.
Some places, like Henrico County, have not needed to venture into the mandatory category for their customers in two decades.
Bentley Chan, the director of Henrico’s department of public utilities, said that of the eleven data centers in the county, only one makes it into the list of their top ten water users. Apartment complexes and hospitals are the biggest water consumers there, and they don’t have specific usage rules in times of drought.
“It’s not just on the residential customers (to restrict water use) and you’ll find that a lot of the industrial users have extraneous uses, such as irrigation, additional cleaning, and things of that nature,” Chan said. “And we do ask everybody to be a part of the mandatory restrictions … to preserve the flow in the James River.”
Similar policies are used in Loudoun and Fairfax counties that house over 200 data centers combined. In Fairfax, the county follows guidance from the Metropolitan Washington Council of Governments that requires all customers to implement reductions under the mandatory orders.
In Norfolk, there are no data centers online at this time that use water from their utilities, according to a utility representative. The representative went on to state that since they get their water from multiple sources, it is rare to have to implement restrictions.
“If there comes such a time (of data centers), the department would analyze the capacity versus the needs and factor in all conditions to ensure they’re able to adequately provide for all customers,” the representative said in a statement.
Western Virginia Water Authority provides water to 69,000 customers in the Roanoke area, where there are also no data centers online yet. A representative told the Mercury that they are considering updating their policies once a data center is built – with one from Google expected to begin taking in water in 2028 that will be authorized to use up to 8 million gallons of water per day.
Lawmakers, who will meet at the state Capitol on Monday, June 22, have closed in on a budget deal. (Photo by Charlotte Rene Woods/Virginia Mercury)
After months of debate and an increasingly fraught battle over how to tax and regulate data centers, Virginia budget negotiators announced Friday evening that they’d reached a deal featuring a new energy consumption tax for the industry that’s expected to generate $1.2 billion over the biennium.
The new plan also includes 4% raises for teachers each year, and roughly $285 million for health insurance from the state marketplace and food assistance funding for low-income families. It will also give localities authority to impose a 1% sales tax for school construction and renovation, if they choose. Nearly $1 billion has been allocated in the revised budget as contingency reserve to cover anticipated gaps from reduced federal funding.
The Virginia House of Delegates will convene Monday afternoon in Richmond and the state Senate will meet the same day, as both chambers vote to finalize the budget, which will take effect July 1.
“This budget agreement reflects our shared commitment to making Virginia more affordable for families,” Sen. Louise Lucas, D-Portsmouth, and Appropriations Chair Del. Luke Torian, D-Prince William, said in a joint statement.
“At a time when too many households are feeling squeezed by rising costs and economic uncertainty, this conference report makes historic investments to lower costs, strengthen our schools, protect access to healthcare, expand economic opportunity, and maintain the Commonwealth’s strong fiscal foundation,” they added.
The House had been scheduled to meet last Thursday but Speaker Don Scott, D-Portsmouth, canceled the session, citing budget negotiators’ failure to reach an agreement. By Thursday, leaders in both bodies had signaled negotiations were progressing and legislators were closing in on a deal, the Richmond Time-Dispatch reported.
The issue that paralyzed the process for weeks was whether data centers should continue to be exempt from paying sales and use tax. Lucas proposed eliminating the exemption and was the most fierce defender of that stance until last week, when the Senate released an updated budget that removed the provision to revoke the exemption,
Lucas instead pitched a tiered tax for data centers based on their generator use and traveled statewide in recent days, drumming up public support for her chamber’s plan to levy more costs onto data centers, which they said would net the state $1.8 billion.
“We know technology is not bad,” Lucas said Tuesday on a tour stop in Chesterfield. “You know, we all can benefit from technology, but we, as a government, have not done a good job in managing the regulations and the impact on our communities and that’s what we’ve got to rein in.”
The House released a reworked budget proposal last Friday that stripped environmental stipulations the body had previously recommended but preserved the tax exemption for the digital facilities that now number in the dozens statewide.
The Senate is set to gavel in at 10 a.m. Monday and the House will convene at 2 p.m.
Editor’s note: This story has been updated to include details from lawmakers’ budget deal, released Friday evening. Stay tuned for The Mercury’s in-depth budget coverage this week.
By Eric Bonds, Braderick Hatch Jr., Fiona Steffens Virginia Mercury
By scouring available public records and submitting Freedom of Information Act requests, we learned that local governments in the commonwealth have allocated at least 19.6 million gallons a day to Amazon, guest columnists Eric Bonds, Braderick Hatch and Fiona Steffens write. (Photo by George Frey/Getty Images)
How you look at something – the frame you use and your perspective – often influences what you see.
This holds true with the issue of data centers and water use. Amazon recently reported that it withdrew a total of 2.5 billion gallons of water for data center cooling operations in 2025. That seems like a lot of water.
But Amazon also points out that Americans used 3.3 trillion gallons of water that same year to grow their gardens and lawns.
The company apparently wants to assure you that the water it uses for its data center operations, in comparison to other uses of water across our very large country, is not such a big deal.
Of course, Amazon doesn’t operate its data centers across the entire nation. It does so in only a few states, and nowhere at higher concentration than in Virginia.
We wanted to learn for ourselves how much water local communities have promised to Amazon for data center cooling in our part of the state, the region between Northern Virginia and Richmond, including Louisa, Spotsylvania, Caroline and Stafford Counties.
By scouring available public records and submitting Freedom of Information Act requests, we learned that local governments in the commonwealth have allocated at least 19.6 million gallons a day to Amazon.
This, we think, is an underestimate. It doesn’t include at least one large water-cooled data center campus in another nearby county that might end up being leased and operated by Amazon, but is currently being constructed by another company. And it doesn’t include other potential Amazon data center campuses that have not yet been approved or are being held up in court.
Even so, 19.6 million gallons a day seems like a good deal of water. It’s enough to fill 980 backyard swimming pools every day. If the average American uses 82 gallons of water a day, it’s enough to sustain 239,000 people.
But Amazon tells us not to worry. The company has ambitious goals to become “water positive.” To Amazon, this means “replenishing more water to communities than we use in our direct operations.”
But being “water positive” depends on your scale of analysis.
For instance, Louisa County plans to provide seven million gallons a day to two separate Amazon data center campuses. Amazon is paying to construct the new water infrastructure that will make this possible.
On one hand, this is “new” water to Louisa County that wouldn’t otherwise be available for industrial use without Amazon’s funding. But from the perspective of the larger North Anna reservoir and river system, it still constitutes a withdrawal.
While Amazon is using raw water for its operations in Louisa County, in other localities the company is investing in extensive “purple pipe” systems that will capture water that would otherwise be sent downstream in order to circulate it to its data center campuses. The company is proud that it “works with utilities to collect treated wastewater, clean it to appropriate standards, and reuse it to save drinking water.”
Amazon doesn’t mention, however, that it will lose more than half of this water through evaporation as it cools its data center facilities, sending most of it up into the atmosphere. So something that appears to be water positive from the perspective of a community hosting an Amazon data center campus might also be a net water loss to a river system and to downstream users.
Even so, Amazon claims, it doesn’t use water to cool its operations throughout the whole year, only during the hottest days in Virginia.
A company spokesperson, for instance, marked up a water service agreement between Stafford County and Amazon we received from a FOIA request, in which the county promised to deliver more than five million gallons a day. The spokesperson wrote to us that, “actual annual use is much lower. Based on 10 years of data, the campus only needs cooling water about 4% of the year during the hottest months.”
The idea that Amazon is spending tens of millions of dollars to build a water system that it will only use for fifteen days out of the year strains credulity. Even if this is true, those are millions of gallons of water being diverted away from our rivers and streams during the peak of summer, when flows are the lowest and water is most needed.
It’s especially concerning when most of the state is in a severe drought, as we are now experiencing and may endure again in future years.
Beyond being Virginia’s leading data center company, Amazon has attained near- monopoly status as an online retailer and delivery service. It spends $19 million a year on lobbying alone, according to the Center for Responsive Politics. It funneled almost $10 million to political campaigns in 2024 in order to influence elections, the same source reports.
Amazon, needless to say, also has a powerful public relations operation. It uses its economic and political power to avoid paying taxes that other companies and most individuals have to pay.
And in Virginia, the company and others in the data center industry are exempt from paying sales and use tax, which lawmakers say costs us nearly $2 billion annually. That exemption is the sticking point in ongoing budget negotiations; if legislators don’t finalize the spending plan by June 30, with or without the tax exemption, the state will experience its first government shutdown.
Amazon encourages us not to worry about all the water local governments are allocating to the company in central Virginia. It assures us that it is a good steward of this resource, and that it cares about sustainability.
But Amazon, just like any company with vested interests and a profit motive, doesn’t always share the complete picture. It frames the view it wants the public to see.
Given the massive size of this company and the ways it has abused its power in the past, Virginians would be wise to keep a watchful eye on how Amazon is using water. And as communities consider approving yet more data centers and additional water service agreements, Virginians may want to consider when enough is enough.
Sen. L. Louise Lucas, D-Portsmouth, speaks during a Chesterfield stop on her statewide listening tour about data centers. (Photo by Shannon Heckt/Virginia Mercury)
On Tuesday, the Virginia Senate released its latest budget proposal that preserves a sales and use tax exemption for the data center industry, the major hangup that has gummed up negotiations between both legislative chambers.
The revamped proposal also adds a tiered tax for the industry that targets diesel generators and would generate $1.8 billion for the state, Senate leaders said.
Sen. Louise Lucas, D-Portsmouth, has advocated to axe the exemption for months but amid stalled negotiations that risk a government shutdown if a budget isn’t finalized by June 30, the new proposal from her chamber signals willingness to compromise, with a sustained goal of regaining money the state misses out on due to the exemption.
“We know technology is not bad. You know, we all can benefit from technology, but we, as a government, have not done a good job in managing the regulations and the impact on our communities and that’s what we’ve got to rein in,” Lucas said Tuesday night at a middle school in Chesterfield at a stop on her data center listening tour.
The new Senate spending plan would levy a tiered impact tax on the types of backup generators that data centers use. The diesel generators have been a point of contention for residents who live near data centers due to heightened concerns over the air pollution released from the generators.
The older, Tier 1 and 2 model backup generators release the most pollution. A new state law requires all new data centers that apply for an air permit to use Tier 4 models, which, along with tier 3 models, are cleaner.
The Senate’s proposed data center tax would be distributed this way:
– $45.00 per permitted kilowatt electrical (kWe) on any Tier 1 and Tier 2 generator;
– $37.00 per permitted kWe on any Tier 2 backup generator retrofitted to be a Tier 4-
equivalent backup generator, Tier 3 generators, and any generator powered by natural gas
– $35.00 per permitted kWe on any Tier 4 generator or any other generator.
Each quarter, data centers would remit the fees to the Department of Taxation and deposited to the general fund.
The key term is “permitted.” Data centers rarely run their backup generators unless there is an emergency power outage or for short periods for monthly testing. But they are permitted for vastly larger amounts than their actual use – which would mean more tax revenue under this plan.
According to Senate finance committee officials, the new generator tax would bring in an estimated $1.8 billion over the biennium. This would be about half of what the state could make in tax revenue if the sales and use tax exemption for the industry was revoked.
The Senate plan, similar to the House, would create a workgroup to generate policy recommendations on how to phase out the sales tax exemption for the industry and present a report to the General Assembly in the fall.
When asked how this group’s report would differ from past reports, such as the 2024 JLARC study on data centers, Lucas said it won’t reveal more than what the state already knows about the impact of data centers across the commonwealth.
“I don’t expect that there’s going to be anything new coming out of it. I actually think it’s a waste of time. But since they want to do it, we will accommodate them,” Lucas said Tuesday.
Lucas said that the House and Senate conferees planned to meet late into the night on Tuesday to work out a deal.
House Speaker Don Scott, D-Portsmouth, cancelled the chamber’s special session on the budget that had been scheduled for Thursday in Richmond, since a deal with the Senate has not been finalized.
Lucas said that the goal for budget conferees of both bodies is to have a deal in place before the Senate is slated to return to the Capitol on Monday.
In Virginia's 2nd Congressional District, four Democrats are vying for the chance to unseat Republican incumbent Jennifer Kiggans. The Virginia Democratic primary is Aug. 4. (Photo by Ross Williams/Georgia Recorder)
This summer, four Democratic candidates will face off in a primary for the chance to oust incumbent Republican representative Jen Kiggans in Virginia’s 2nd Congressional District.
The Virginia Beach-anchored district is politically purple and often oscillates between partisan control, though in past years it had a decidedly Republican lean.
Its nearly 600,000 residents backed Gov. Abigail Spanberger last year by 53% and analysts consider it flippable — making it a key contest that could help determine partisan control of Congress.
All four Democratic primary candidates — which include the district’s former representative Elaine Luria, acute care doctor Nila Devanath, former USAID worker Patrick Mosolf and regional government official Bill Fleming — seek to hold Kiggans “accountable” and help congress provide a check and balance to the “corruption” of President Donald Trump.
Who’s who
Kiggans, a Navy veteran and nurse practitioner, has represented the district for two terms after ousting Luria, who also represented it for two terms. With no primary challenger, she did not do an interview for this story, but she did respond to questions by email.
With Navy veteran Luria formerly representing the district, she already has backing from the Democratic Congressional Campaign Committeealong with Democratic leadership in Virginia including Gov. Abigail Spanberger and Sen. Louise Lucas, D-Portsmouth.
During her time in Congress Luria backed the creation of the Affordable Care Act’s Enhanced Premium Tax Credits — which have since expired but helped reach more people struggling to afford healthcare. She also backed the 2022 Inflation Reduction Act, a range of energy efficiency and healthcare affordability measures.
Devanath,the daughter of Bangladesh immigrants, is an acute care doctor but previously worked as a lawyer at a legal clinic defending domestic violence survivors.
If elected, she plans to bring her legal and medical insights to Congress. She has already made trips to D.C. to meet with members of finance committees, she said, to prepare for how she can help address economic issues if she earns a seat on Capitol Hill.
Virginia Beach Soil and Water Conservation District director Bill Fleming hopes to join the U.S. House Committee on Agriculture if elected so that he can help advance environmental laws. He shares many progressive policy priorities with some of his primary opponents but considers himself an “independent democrat.”
From serving as director of a homeless shelter to time spent working for USAID, Mosolf said his time spent solving problems has helped him prepare to take that work to the nation’s legislative body. He was motivated to run and find new routes to solve problems after losing his job to Trump’s closure of USAID.
Addressing the cost of living
The rising cost of living, from groceries to housing to healthcare, is a motivating factor for Kiggans and all four Democratic candidates.
Luria said Kiggans expressed interest in bipartisan collaboration after ousting Luria from the seat in 2022, a stance she said was in contrast with Kiggans’ votes in favor of Trump policies.
Ahead of the passage of the One Big Beautiful Bill Act last summer, Kiggans joined an open letter in opposition to aspects of the bill she ultimately voted for.
Kiggans was previously outspoken about the need to renew expiring ACA tax credits, Luria said, even writing a letter in support of extending the credits, but ultimately changed her tune.
“Writing a letter that is in opposition to something you’re voting for — it just doesn’t work that way,” Luria said.
In an email, Kiggans said her initial support of renewing the credits was conditional on “meaningful reforms” to strengthen protections against “waste fraud and abuse.”
All Democratic challengers said addressing affordability issues will be a priority for them, if elected.
“I think it’s going to take a lot of small things. It’s not just pushing a magic button,” Mosolf said.
All the Democratic contenders said they would work to extend the ACA subsidies and undo the healthcare provisions of the reconciliation bill.
They are supportive of a massive bipartisan housing bill that is nearing Trump’s desk and could see his signature; if it doesn’t, though, they said they will try again.
On healthcare, Devanath and Fleming are backing a growing Democratic embrace of universal healthcare. The idea is to replace private insurance companies with government-run insurance available to everyone.
Because uninsured and underinsured people are more likely to put off primary care, Devanath said she’s increasingly treating people in critical condition or for whom more drastic measures could have been prevented.
“You have to have people who are willing to be bold,” Devanath said. “Instead of following incremental change, let’s go for the gold. Put it out there, stick to it, and see where we land.”
Devanath and Fleming also support the Working Americans’ Tax Cut Act, which would create a tiered surtax on income over a million dollars.
“It’s one thing to sit and grumble about something while you’re watching television, but it’s better to try to get a seat at the table, so that you can maybe affect change,” Fleming said.
Stock trading crackdown, campaign finance reform
Luria said Congress should hold itself accountable by banning stock trading of elected officials, pointing to what she called a “long list” of ways Trump has capitalized on his presidency to financially benefit his family or allies.
As a congresswoman, Gov. Abigail Spanberger championed an effort to prevent lawmakers from capitalizing on sensitive information and disproportionately benefitting from their positions of power.
Luria was not always on board with the proposal, calling it “bullsh-t,” but her stance has evolved into support.
“Congress can set the example and actually walk the walk,” she said.
All of the Democratic contenders want to address how candidates receive donations for their campaigns by reigning in large political action committees’ donations along with “dark money” contributions, large entities’ donations that are not publicly disclosed.
Luria’s Democratic challengers have taken issue with her updated stance on campaign finance. In 2018, she’d signed a pledge to not take corporate money before accepting $34,000 from corporate PACs in 2020.
Luria’s donors have included the Democratic Majority for Israel PAC and some of her donors have also contributed to American Israel Public Affairs Committee. After a United Nations committee concluded that Israel is committing genocide in Gaza, Luria’s challengers said it would be unethical for them to take money from groups that support Israel. (Israeli officials have denounced the report as “distorted and false,” according to NPR.)
While AIPAC has historically supported both parties so long as candidates are “pro-Israel,” the group’s supporthas emerged as a rift among some Democratic candidates in recent election cycles.
Kiggans, who has also been boosted by AIPAC, has supported U.S. involvement in Israel’s affairs. In 2024 she voted for military aid to Israel in a package of bills she said were “not perfect,” but needed at the time.
The conflict, initiated by America, has contributed to spiking gas prices because Iran is a critical global player in oil trades.
“When the Iran conflict is over, gas prices will come down and we’ll work to get them even lower with American energy dominance,” Kiggans said.
While Democrats have lambasted Kiggans for voting for the Big Beautiful Bill, she emphasized that the measure also “cut taxes on social security, tips and overtime” to “put more money in the pockets of Virginians.”
The two-term congresswoman has bucked Trump’s administration over a new rule that will exclude post-baccalaureate nursing degrees from a “professional degrees” list, joining a bipartisan letter in opposition.
Kiggans was also critical of the Trump administration’s efforts to stop construction of Dominion Energy’s offshore wind project, which is located in her district.
Still, her Democratic opponents said she has too often aligned with GOP majorities and the president, including her endorsement of federal workforce trimming despite the 2nd district having among the largest concentration of federal workers in the state.
“The bottom line is she has put Trump over the people of Hampton Roads,” Luria said. “People will hold her accountable at the ballot box in November.”
The Democratic hopefuls will face off for the chance to defeat Kiggans in the Democratic state primary election on Aug. 4.
Editor’s note: This story has been corrected to reflect that Luria has not received donations from AIPAC, as previously stated, but some of her donors have contributed to the organization.
The House of Delegates, pictured here on the final day of the 2026 legislative session, proposed a revamped budget stripped of environmental standards data centers would have had to meet to keep their sales and use tax exemption. (Photo by Markus Schmidt/Virginia Mercury)
Oh yay, another commission.
Leaders in the House of Delegates are continuing to tweak their version of a state budget, but they aren’t backing down from their fight with the Senate over data centers. What they are backing down from is their former insistence that data centers use clean energy. Instead, they propose to punt this and every other data center issue over to a commission.
Is that supposed to resolve the budget impasse? Because if that’s the idea, it sure seems like an odd way to go about it.
Recall that Senate Finance Chair Louise Lucas, D-Portsmouth, wants to terminate the sales tax exemption that data centers have exploited to the tune of $1.6 billion lost from state coffers. (The total subsidy rises to $1.9 if you include the exemption from local taxes, but what’s a few hundred million bucks among friends?)
The tax isn’t something specific to data centers. It’s the same one all the rest of us pay. The argument that there are better ways to spend the money than to give it away to the world’s richest corporations has reaffirmed Lucas as a bonafide social media star at age 82, and she is enjoying it very much.
In response to the new House budget proposal, Lucas tweeted out a tweak of her own: She now proposes to subject data centers to a nearly-equivalent fee that would generate $1.7 billion in revenue. Lucas and allies have launched a “listening tour” to build support for her approach.
But the House budget does not eliminate the exemption, leaving the two sides at an impasse.
The House is set to reconvene on June 18, and the Senate on June 22. The chambers will attempt to resolve their differences and adopt a budget before July 1 to avoid a government shutdown.
House leaders argue that data center operators relied on this tax exemption when they chose to locate in Virginia. They signed memorandums of understanding agreeing to a few minor conditions, and in return they were promised they wouldn’t have to pay sales tax on computer chips and other equipment until 2035. (In the case of Amazon and any other corporation that sinks $50 billion into data centers in Virginia, the date has been extended out to 2045.)
But the House budget proposal originally incorporated provisions drawn from legislation introduced by Del. Rip Sullivan, D-Fairfax, requiring data centers that take advantage of the tax exemption to buy increasing percentages of renewable energy, refrain from using onsite fossil fuels as their primary energy source, and begin phasing out the backup diesel generators that threaten air quality. The bill passed the House but died in the Senate around the same time Lucas decided there shouldn’t be a tax exemption at all.
The disagreement left Virginia without a budget for the new year. Now suddenly the House has issued a new proposal that has the support of Gov. Abigail Spanberger. Instead of resolving the impasse, though, it actually goes backwards on regulating data centers.
It still leaves the tax exemption intact, but now “includes explicit direction for the establishment of a Commission to thoroughly evaluate the direct and indirect costs and benefits of the data center industry.” The commission is to issue a report and recommendations for legislative and budgetary changes, which the General Assembly will then consider next year.
Are you feeling a little prickle of déjà vu? That’s because we have seen this before, and not very long ago. In December 2023, the General Assembly headed off action for all of 2024 by directing the Joint Legislative Audit and Review Commission (JLARC) to assess the impact of the industry on energy demand, state revenue, natural resources – essentially, the same things this year’s commission is supposed to look at all over again.
You remember the JLARC report. It sounded a dire warning against the consequences of “unconstrained” data center demand. The report made a stir in December of 2024 when it was issued. Statements were released, proposals were floated.
And thus warned, the General Assembly went into the 2025 session and did . . . nothing.
Doing nothing pretty much described 2026 legislative action on data centers, as well. Among the few reforms House and Senate Democrats seemed to agree on were that data centers needed to buy renewable energy and storage to limit the increase in Virginia’s carbon emissions and to decrease the pollution from diesel generators. The House did this by way of Sullivan’s bill; the Senate supported a different approach. Each chamber killed the other’s bill.
That left the House budget as the only vehicle for progress this year on one of the central problems of the data center buildout. By backtracking now, House leaders and the governor show they are willing to capitulate entirely to the data center industry and its labor allies.
To be sure, a budget amendment this year that puts conditions on tax exemptions in future years would need to be followed with new legislation to lock in the requirements. And for that purpose, House and Senate members should definitely work together this summer to align their proposals, ensuring both chambers agree on the terms of the legislation before it is introduced.
A commission with that task could be useful. After all, the Commission on Electric Utility Regulation, now rebranded as the Energy Commission of Virginia, succeeded in bringing together House and Senate members around a striking number of good energy bills this year.
But a commission that is thrown together suddenly and instructed to retrace the steps of a report issued barely 18 months ago seems suspiciously like a substitute for action.
This is all too familiar. When it comes to data centers, inaction seems to be the point.
