Loudoun Power Supply Solutions

It's been eight months since Dominion Energy Inc. (NYSE: D) dropped the bombshell that Loudoun’s demand for energy was outpacing its ability to provide enough electric power. But Loudoun’s top economic development official sees a path forward for new data center companies to address the constraints.

The fact is new development hasn’t stopped coming since Dominion put a two-month pause on connecting new data centers planned for places that lacked enough transmission line capacity to transport the necessary power. That area, called “data center alley,” sits along the Silver Line corridor around Waxpool, Sterling and Dulles International Airport in the eastern part of the county.

While Dominion has done its own analysis on how to make way for future data centers in this area, some developers are stepping up, too.

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Take for instance Northern Virginia developer PowerHouse Data Centers, a joint venture between McLean real estate company American Real Estate Partners and Chicago investment management firm Harrison Street. PowerHouse is building its first data center in the region — expected to reach a $400 million economic investment and create 50 jobs — right near Loudoun's most potentially impacted area at 21529 Beaumeade Circle, with two other major projects in the works.

PowerHouse expects tenants to take over the 265,000-square-foot facility in July, with final construction slated to complete in October. But how will those tenants get power? And how are other data center providers working with Dominion to secure the power they need, too?

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Buddy Rizer, director of Loudoun County Economic Development, said the solution is unique to each project.

"We're in a pretty good place. I would say that the industry is very resilient,” Rizer said in an interview. “This has been a very unique experience because it wasn't something we anticipated or planned for. We're just taking each project, working with Dominion, working with the industry, working with the operator, and just trying to find the best solution.”

For PowerHouse's ABX-1 project, that strategy looks like working with Dominion to build a new 300-megawatt substation on the 10-acre property where its first data center will be located.

PowerHouse operates by purchasing land and building out shell data centers with power for data center company tenants, who then take control of the campuses via lease. In Loudoun, it's also providing land for the substation, which will provide up to 80 megawatts of power to PowerHouse's data center as well as "surrounding customers in the area," a PowerHouse spokesperson said.

But the other piece of ensuring new development has long-lasting power is Dominion having enough transmission lines — which the company has said is the subject of constraint

“Substations without transmission aren't very valuable. I will say that Dominion and PowerHouse, they've broken some new ground here. They're being very creative in land use,” Rizer said. “It's great to see in a time like we're going through people being creative and looking for solutions. I'm pretty excited about the plan that they've put together.”

That's another method that Dominion has taken to address the area's needs, after an analysis last fall to understand the current transmission capacity and where things stood with new transmission and substation projects in the queue. Dominion decided to accelerate some of those upcoming projects through 2026 to meet new demand.

Those include replacing wires on three existing transmission lines to add more power capacity, expanding the current Goose Creek substation, and building two new transmission lines in the long-term, a Dominion spokesperson said.

"We’re developing several transmission projects in eastern Loudoun to serve new data centers, including ABX-1," said Dominion spokesperson Aaron Ruby. "We’re working closely with data centers and local officials to support the sector’s growth across the region."

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A PowerHouse spokesperson declined to comment on how Dominion's energy constraints impacts its future plans, saying only that the company is “working with the energy authority.” But construction on that substation started in early March and is expected to complete by the end of 2025, a PowerHouse spokesperson said.

This will be the first of PowerHouse's many data center facilities planned for Loudoun County, marking a $1 billion investment — with a total of six powered shell data centers totaling 2.1 million square feet to come, the company said.

Other local plans in the works include a 23-acre project called PowerHouse Arcola with two data center buildings totaling 364,100 square feet, under fast-track status now through the county’s economic development agency and slated for 2025 or 2026, per the company’s website and confirmed by Rizer. Then, there’s a future project for four powered shell data centers at the former AOL headquarters on Pacific Boulevard in Ashburn.  

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