Why Should Delaware Care?
Proposals to build at least five data centers in New Castle County have raised concerns that the subsequent energy demand could overwhelm a regional power grid that is already straining from a supply crunch. Over the past year, those concerns have also sparked one of the biggest political mobilizations in the state.
Earlier this month, Spotlight Delaware held its “Spotlight On: Data Centers” event at Wilmington University in Dover. It featured local and regional experts speaking about the impacts of those energy-hungry facilities on local economic development, energy infrastructure and environmental sustainability.
One particular panel discussion, led by land-use reporter Olivia Marble, included four legislators who have been central to debates around data centers in their respective states.
Two of the panelists were from Delaware and two from Virginia, where more than 200 data centers have plugged into the local economy.
The four included Mike Turner, the vice chair of the Loudoun County (Virginia) Board of Supervisors; Virginia State Sen. Kannan Srinivasan ( D-Loudoun); New Castle County Councilman Dave Carter; and Delaware Sen. Stephanie Hansen (D-Middletown).
Below is a transcript of Olivia’s conversation with the elected officials. It has been condensed and edited for clarity.
Panel discussion: Across State Lines: Virginia and Delaware Lawmakers on Data Center Regulation
Olivia: How have you weighed the environmental and energy costs of data centers with their economic benefits in Virginia?
Supervisor Turner: The question presupposes that we sat down 25 years ago and weighed the economic benefits. We did not. We didn’t even know what a data center was. In 2000, our zoning administrator said, “Well, we’re not sure, we think data centers are office parks.” So anywhere you can build an office park by right – meaning you don’t need local government approval – then you can come build a data center …
Our economic development director in 2008, eight years later, said, “We’re sitting on a cash cow.” And he began to aggressively market why data centers should come to Loudoun County. And that’s when the industry really took off.
Olivia: How have you weighed it now?
Supervisor Turner: We’re now on the other side of the bell curve coming down.
And the bell curve is (motioning with his hands around a bell curve): We don’t know what a data center is. (then) It gives us a lot of tax revenue. That’s really a good idea. (then) Let’s get more of them. We really like data centers. Look at all the nonprofits they’re funding. (then) Okay, maybe we should slow down the data centers. We can’t slow them down because they’re buying all the by right land. What do we do now? (then) Oh my god.” As of last year, our hair is on fire. The population hates data centers. And what do we do now? Because we’ve got 200 plus data centers in Loudoun County …
Our budget is too dependent on data center revenue. Our operating budget is somewhere in the neighborhood of $1.7-1.8 billion. Of that, we get $1.3 billion just from data center tax revenue, and that comes in every year like clockwork.
Olivia: Councilman Carter has done some research about whether New Castle County could see similar economic benefits or not. Now, this is a question that’s still up for debate, but Councilman Carter, what have you found?
Councilman Carter: I’ve looked at it in detail and compared our tax structure with Loudoun County… Based on a 1.2 gigabyte data center [the size of the largest proposed data center in Delaware] … the difference would be about $212-275 million for Loudon County and about $14-28 million for New Castle County. So it’s almost an order of magnitude less.
And here’s the real kicker — if we end up with a 6% increase in energy cost energy rate, it will cost Delaware rate payers about $49.6 million, twice the revenue that we would get under our current tax structure.
Olivia: I wanted to go back to what you were saying, Supervisor Turner, about how people hate data centers. What exactly are people concerned about?
Senator Srinivasan: …The environmental concern is a big one, the noise, the use of generators, pollution for backup, that’s a big concern. And the energy — we are the number one importer of energy, at 40%… So we have all of these concerns, but the economic benefit is undeniable. The question is, how do you do this in a balanced way, that it’s right for the energy situation, that people don’t pay more electric prices, and it’s right for the environment, and then the data center industry is paying its fair share.
Olivia: Senator Hanson, I know that you’ve done a lot of work in an energy sphere. How much energy does Delaware import, and what do you think is the cost benefit analysis for data centers in Delaware?
Senator Hansen: Delaware imports 60% of the energy that we use. It’s less energy [than Virginia], but it’s 60% of what we use. And Delaware also ranks the very bottom, last of the 50 states, as far as the amount of energy that we produce in state. So we are very much energy constrained. And when energy is pulled from the (regional) PJM grid to go to Virginia for Loudoun County, we feel that here …
It really comes down to data centers needing to generate their own electricity. We have to find more energy somewhere, because right now, we’re all pulling from the same pool, and that’s a tremendous problem for all of us.
What is the cost benefit analysis from Delaware? Well, I think that that’s currently a hot-debated, ongoing discussion right now. Let me take both sides of it. Delaware’s manufacturing jobs have been on the downtrend for a long time. We are losing manufacturing jobs, and that is not healthy for a state. It’s not healthy for our economy, and it’s something that we would like to be able to change …
So when you have an industry that comes in and says, “Look, we’re going to bring to you manufacturing jobs, we’re going to bring to you construction jobs, particularly that are going to last a certain number of years, while we put the industry in place. It’s going to put people to work, there are high paying jobs. And we’re going to provide you with tax revenue.” Although how much tax revenue is certainly a question at this point, that’s a hard thing to say no to.
On the other hand, we are competing for that energy. The energy for just the Starwood project, 1.2 gigawatts, is half of the amount the entire state of Delaware uses at its winter peak. We only use 2.4 gigawatts at our winter peak. Given that we are already being stressed, our costs for electricity are already going up because it’s being apportioned to other places — it’s a supply/demand issue. How is that going to be when we have a data center? What is that going to do to our energy supply cost? So it’s an active question right now.
Olivia: Councilman Carter, what was the legislation that you recently passed, and why did you think it was necessary?
Councilman Carter: … I’ve been in public service almost 40 years. This was the most difficult thing I ever did … I was put to the point where I couldn’t have public meetings without county police present. Our meetings had to have six officers there to get it through … What the ordinance actually did was define data centers as a specific use under our code. It restricts them to basically heavy industry or industrial zoning, which tends to have two things: they tend to be near high voltage power lines and away from communities. We basically took away by-right zoning, because we know there will be some unintended consequences …
Through special use approvals, we can put specific requirements on it if we see a problem that wasn’t anticipated, to add additional protection as this industry grows and changes … We do have noise studies and mitigation requirements. You cannot elevate above the existing noise level of any established community.
Supervisor Turner: That’s huge. That’s the most aggressive noise ordinance in America. That’s very aggressive, and I’m going to use it as my template from now on.
Councilman Carter: In my view, Mike [Turner] knows more about data centers than any elected official in the country, so that means a lot to me.
Olivia: I heard a data center in Loudoun County right now is generating its own power using gas turbines. So either Senator Srinivasan or Supervisor Turner, could you speak to that?
Senator Srinivasan: It is a huge issue. The complaint about noise is a major one. But that’s an exception. There’s only one data center in the entire county that does that. One of the interesting things about data centers is they don’t want to be in the power generation business ideally. They’re in the data center business. They would love to connect to the grid for a lot of reasons, including reliability, but where we are globally, particularly in this country, you see a lot of behind the meter initiatives.
Olivia: The reason why it’s generating its own power is because of the long wait to connect to the grid, because of how many data centers are coming, right?
Senator Srinivasan: Yeah. When I first got elected to the house in 2024 I heard from the industry it was a five to seven year wait time. Then I got to the Senate last year, I heard seven to 10 years. This year, before the session, I was told by one of the hyperscalers it’s 10 to 14 years.
Olivia: To connect to the grid?
Senator Srinivasan: At 100% capacity. I lost my sleep on it, because I said, “Wait a second, who would put any money on this stuff? If I can’t get power, I can’t be in function.” That just is a sign of how much we are behind in generation.
