West Virginia is preparing for a data center boom, although state leaders are still absorbing what that means.
State delegates went through a couple of days of data center discussions during meetings in Charleston — so that they can gain better understanding and so they can better explain to their constituents what to expect.
Data centers, the warehouses for computer servers, are proposed for different locations in West Virginia, including Berkeley and Jefferson counties, the Canaan Valley area, Putnam County and Mason County.
Data centers are enormous energy users, and that is only expected to grow as artificial intelligence and other computing innovations gain momentum.
They are prolific in states like neighboring Virginia, but they are also controversial among residents because of their reputations for light, noise and water usage. They are not major employers but can contribute significantly to local property taxes.
During a presentation to delegates Tuesday, state Tax Commissioner Matt Irby said the property tax revenue from a heavy data center presence in Loudoun County, Va., alone is roughly equal to the combined property tax revenue of every county in West Virginia, and that data centers are about half of that Loudoun County base.
“Loudoun County’s property tax revenue is about $2.4 billion last year. That is equal to all West Virginia counties’ property tax revenue. So, I think data centers represent about 50% or so,” Irby told lawmakers. “It’s a pretty incredible amount of money.”
Yet West Virginia is still at the beginning stages of working through a lot of issues, including how to assess the value of the coming data centers for taxation.
Irby describes those calculations as fundamentally difficult because West Virginia doesn’t yet have an operating data center to use as a real-world benchmark, and because traditional valuation methods are hard to apply cleanly.
“Our numbers aren’t really set in stone or solid at this point, that we don’t really have a data center to value, so as a result we have to use other things to try to gauge what those values are,” he said.
He later added, “There is a lot of missing information as we stand here right now in trying to tell you what the value of a data center is and how much tax it’s going to produce.
“We’re going to primarily use an income approach to value,” he continued but added, “we don’t actually have enough information for right now.”
Delegate Tristan Leavitt, R-Kanawha, participated in a legislative discussion Monday of data center issues and then appeared today on MetroNews Talkline.
He said data center developers will typically look for sites with strong electrical and network infrastructure. They also require large, suitable parcels and water sources, although more and more operate on closed-loop systems.
“The key things that these companies are looking for, just to be clear, is the places where they have proximity to the connectivity, so they need the power and transmission lines. They need the land, and they in some cases may need initial water. A lot of these are closed loop systems now,” he said.
“So with those parameters, you know, they’re looking for any sites that are available, and we have a lot of great places for them to go in our state.”