A Virginia state agency has fined a data center nearly $2.5 million for exceeding emissions limits last year, the state’s largest civil penalty against a data center to date.
The notice published online details an event in June of 2025 when the Microsoft facility in Leesburg, Virginia, reported a failure of an electrical substation and had to operate 62 emergency engines for a seven-day period, according to the Department of Environmental Quality. The state says the facility exceeded its permitted fuel emissions limits for pollutants including CO, VOC, PM10 and PM2.5 during that time.
As part of the settlement with Microsoft, the tech giant has agreed to invest $2.4 million toward an environmental project underway in Loudoun County, where the facility is located, to monitor air quality in the areas containing the highest concentration of data centers. The department says it plans to use the funds secured from the order to deploy dozens of air quality sensors around areas of the state with the highest concentration of data centers.
“As part of our continued commitment to the communities where we operate, Microsoft will support VDEQ’s expansion of air-quality monitoring in Northern Virginia, as they work to deliver additional data and insight into regional air quality,” Microsoft said in a statement to CBS News.
Loudoun County, in northern Virginia outside Washington, D.C., is nicknamed “Data Center Alley” and is home to more than 250 facilities, according to Loudoun County. Community members have voiced growing concern about potential environmental and health impacts.
The nine-member Loudoun County Board of Supervisors voted 7-1 with one abstention on Tuesday night to move forward with pausing the panel’s approval of new applications for a period of one year, effective Sept. 15, as allowed by Virginia law. The county attorney argued an outright moratorium is against state law. Data center applicants can still submit proposals, but the board will not take action during the yearlong pause.
The board is also debating more stringent standards and locations for data centers moving forward. A monthslong review process of recommendations is underway.
“The community must be involved in setting up the new standards and guardrails to guide data center development and to mitigate the damage that has already been done to the environment and well-being of our community,” said resident Greg Pirio of Sterling. Pirio lives across the street from a data center with its own power plant.
He was among those who spoke during around 90 minutes of public comment. Pirio has long raised concerns about noise pollution, health impacts and potential decline of property values in the area.
Opponents of the proposed pause argue the data centers have provided what they call transformative economic benefits, pointing to a projected $1.3 billion in local tax revenue. Supporters of the data center growth say that will fund public education, parks, law enforcement and other services.
“Moratoriums and other anti-competitive policies send a signal that an area is closed for business, for data centers, for the many local businesses that provide goods and services that support the data center industry, for the trade unions and schools that are training and growing the construction and operational workforce, and for other significant economic development projects,” said Nicole Riley of the Data Center Coalition in a written statement delivered to the board.
The moratorium will affect future development, but will not have any impact on current data centers and those already in construction.
