For the past 30 years, Virginia has been the world’s leader on data center approvals and development. The Commonwealth is home to more data centers than any other state, spanning over 63 million square feet of facility space over 7,200 acres, according to a 2024 legislative study. This development has occurred on a locality-by-locality basis, governed by the zoning ordinances and land use approvals required by each city and county in Virginia.

As of Sept. 18, however, Virginia’s data center developers and operators will be facing a fundamentally different regulatory landscape going forward.

In Executive Order 22, Gov. Abigail Spanberger created what her administration has termed “the Virginia Data Center Accountability Framework.” The stated purpose of the framework is to empower local communities to have a meaningful voice in data center development and protect energy affordability, environmental resources and quality of life for Virginia communities and businesses. More specifically, the Executive Order imposes statewide reviews and standards applicable in every local jurisdiction, which have regulated data center development, until now, with very little state or federal intervention or guidance.

These changes come amid crescendoing public opposition to data centers in Virginia. Local governments across the Commonwealth are amending their zoning ordinances to impose additional regulations on data center development and, in some cases, prohibit data center development altogether. In addition to these piecemeal changes in various localities throughout Viriginia, the Executive Order is the Commonwealth’s first major action to broadly address regulation of the data center industry.

Here are several changes that data center owners, operators and developers should be tracking.

Local Governments and Community Toolkit. The toolkit will contain model questions, records requests, guidance for evaluating demands on natural resources and public infrastructure and best practices for community engagement.

Data center developers should take note of the toolkit’s recommendations for site design, buffering and mitigation that will be recommended to reduce anticipated impacts on neighboring communities. 

NDA Limitation. Executive branch officials are no longer permitted to enter into nondisclosure agreements to prevent public disclosure of proposed data center developments. Notably, this limitation would not prevent local governments from entering into such NDAs with data center developers.

VA-LEAD Development Criteria. New, responsible data center development criteria, known as Virginia Local Energy and Accountable Data Centers (VA-LEAD) will be drafted, creating a scoring system to evaluate proposed new data centers on their natural resources impacts and noise pollution, among other factors.

The VA-LEAD criteria will be submitted to the governor’s office for approval by Dec. 31, 2027.

End of discretionary state economic prioritization. The Commonwealth will no longer expedite permitting or review for new data center projects that will exceed 25MW of peak electrical demand.

Noise Regulations. By mid-March, the Virginia Department of Environmental Quality (DEQ) must submit an “accelerated timeline” for the drafting and adoption of regulations governing data center noise.

Backup-Generator Review. By mid-March, DEQ and the Virginia Department of Health must conduct a review of backup generators at operating data centers to assess how many exist, their locations, emissions data and means of retrofitting the technology or reducing emissions.

Owners of fully developed data centers should expect information requests from these state agencies and a preference for power generation technology that includes battery storage, fuel cells and non-diesel alternatives.

Designation of Cooling Water Scarcity Areas. The EO designates the Eastern Virginia Groundwater Management Area (EVGMA) as an area where the evaporation of cooling water could have detrimental reductions in water available for other beneficial uses, such as drinking supply and recreation, and directs DEQ to develop criteria for the designation of other areas. A plan for adopting the rule is expected by mid-March.

Data center developers will face additional challenges in developing sites east of Interstate 95, where the EVGMA is located.

Preference for Brownfields and Adaptive Reuse. By May, state agencies and stakeholders must prepare recommendations that examine opportunities for siting of new data centers on brownfields sites and previously developed sites, reclaimed mine lands, and co-location of other industrial uses that can utilize waste heat or reclaimed water from data center operations.

Additional changes include a focus on data center workforce development from within local communities and review of curtailment and methane emissions reductions opportunities at data centers.

Maryland’s Moves

Neighboring states are watching Virginia’s policy shift closely. Gov. Wes Moore released Sept. 23 his own directives for the data center industry in Maryland. In his new executive order, he echoed Spanberger’s concerns regarding transparency and “accountable” data center development. Going forward, Maryland will utilize the same standards and review process for any “large” data center of 25MW or more and a taskforce of executive agency officials will review every project. The public will be able to track all data center projects under review at a single Data Center Dashboard, updated monthly. Any data center permits or approvals issued in Maryland before Sept. 23 are grandfathered and will not be subject to the new requirements of the executive order. Notably, the executive order announced the Moore administration’s support of the repeal the state Data Center Sales and Use Tax Exemption that has been in effect since 2020 – a step that Spanberger did not take in Virginia.

We expect that similar changes may be coming for other states facing increasing data center development requests as public opposition and scrutiny intensifies. Both Maryland’s and Virginia’s general assemblies will convene in January, and data center legislation is likely to be a hot topic for legislators seeking to respond to constituent concerns.  

Miles & Stockbridge’s environmental and land use attorneys are monitoring these changes and assessing their impact on pending, proposed and developed data center operations in Virginia, Maryland and elsewhere.

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