Henrico’s electric bill is going up by $5M; the county is asking employees to help
On the eve of a new fiscal year, Henrico County Manager John Vithoulkas sent a message to every county employee: turn off your lights, unplug your chargers, and think twice before using a space heater.
The reason, spelled out in a June 26 all-staff email, is a nearly 25% jump in electricity rates, taking effect July 1. It’s an increase the county estimates will add $5 million to its annual electric bill across all government and school facilities.
“We anticipate more rate increases for electricity in the years ahead,” Vithoulkas wrote.
Budget writers saw the rate pressure coming. The March proposed Fiscal Year 2026-27 budget noted that “the operating component of the General Fund budget [for Education] included $3,000,000 to meet utility rate increases for existing, new and renovated buildings.”
The budget’s largest electricity line item belongs to Henrico County Public Schools, which budgeted $14.6 for electric services in FY27 — a 17% increase over the prior year’s approved budget.
The Buildings and Grounds section similarly flagged that “adjustments were made to maintenance and utilities due to rising service rates.”
The new rate increase comes as officials already were seeking cuts to the coming fiscal year's budget; in his email, Vithoulkas noted that each county department will seek “ways to reduce expenses by 3 percent in next fiscal year's budget.”
Rate increase not unique to Henrico
But the rate increase is not isolated just to Henrico County – it will apply to all of the 170 or so members of the Virginia Energy Purchasing Governmental Association, which negotiates multi-year electricity contracts with Dominion Energy for governmental entities statewide, including local governments, public school systems and various other authorities.
In addition to Henrico County, other Metro Richmond members of VEPGA include Chesterfield, Charles City, Hanover, Goochland, New Kent and Powhatan counties, as well as the cities of Richmond and Hopewell and the Town of Ashland, among others.
Each of those localities and all other VEPGA members will face the same 25% rate increase.
County officials privately have attributed at least part of the rate jump to rising fuel costs, but they have not tied it to data centers.
Of Vithoulkas’s email to employees, Henrico Communications Director Ben Sheppard wrote: “This email represents good fiscal stewardship and good environmental stewardship, both of which are core values of the County.”
In the past five years, Henrico’s eastern corridor has transformed from farmland into one of Virginia's most significant data center clusters, now home to at least 16 facilities, with more under construction. Data centers are electricity-intensive, drawing power equivalent to small cities.
The connection between their growth and rising electricity bills is now embedded in Virginia utility regulation. In November 2025, Virginia’s State Corporation Commission approved a base rate increase for Dominion Energy, with residential customers facing higher bills beginning this past January, a decision regulators explicitly linked to data center load growth.
The SCC ordered Dominion to shift away from its current cost allocation method for generation costs, with the goal of putting more responsibility on large customers like data centers, which are creating the need for new infrastructure, and reducing the burden on residential customers who are not driving that need.
Whether some part of the VEPGA-negotiated 25% electricity rate increase is directly tied to those same pressures is a question that has not been addressed publicly. Vithoulkas made no mention of data centers in his June 26 email.
He did outline a series of conservation steps he asked employees to take voluntarily:
• turn off lights when leaving workspaces;
• shut down computers and laptops at the end of each workday;
• adjust blinds to reduce solar heat gain;
• unplug appliances and chargers when not in use;
• limit or eliminate the use of space heaters, which Vithoulkas noted can cost the county $150 to $300 per unit annually.
“Each dollar we can save by conserving electricity is another dollar the county can reinvest into staff and the services we provide our residents,” he wrote.
The county has made investments in energy efficiency over the years, including LEED-certified construction standards for new facilities and rooftop solar installations on some county buildings.
Henrico already has approved sweeping data center expansions in its eastern corridor, including plans by QTS for up to 17 new facilities across more than 1,100 acres in Varina, and is now weighing how to manage continued growth through its 2045 Comprehensive Plan, up for a Henrico Planning Commission vote on July 9 and, ultimately, adoption by the Henrico Board of Supervisors after that.
That vote is the next major decision point for how Henrico manages growth, including hyperscale data center growth, in the coming decades. Community groups, including Henrico Civic Action, have raised concerns about the pace and scale of data center approvals, particularly in residential and recreational areas.
