Data center development will face tighter regulations across the Mid-Atlantic after officials in Virginia and Maryland unveiled new frameworks to corral the intense growth.
Maryland Gov. Wes Moore on Wednesday announced an executive order establishing a review process for data centers of 25 megawatts or more whenever developers seek state permits, incentives or letters of support.
The order also creates a task force that will evaluate projects based on their effects on ratepayers and the grid. The governor said local officials will still decide whether projects can ultimately move forward.
Projects that do not align with the new framework can face deferred state review and will not be eligible for state advocacy or certain incentives. Moore also said his administration will seek to repeal Maryland’s sales and use tax exemption that was enacted in 2020.
That followed a day after the Prince William County Board of County Supervisors in Virginia unanimously approved changes that largely end by-right data center development. The county — which is one of the country’s largest data center markets — is set to shrink its Data Center Opportunity Zone Overlay District from 9,698 acres to roughly 3,641 acres, and new proposals outside the overlay must proceed through a special-use permit process.
Prince William created the overlay in 2016 to encourage data center development near high-voltage transmission lines. Prince William’s own planning documents describe the zoning amendment as a structural shift from the previous approach in how the county approves new data centers.
And, last week, Virginia Gov. Abigail Spanberger announced a broad “Data Center Accountability Framework” and signed Executive Order 22, immediately directing state agencies to increase transparency, environmental oversight and scrutiny of the data center industry.
Separately, her administration is proposing legislation for the 2027 legislative session that would eliminate by-right approval for data centers using more than 25 megawatts of power. The legislation would require local approvals for projects, remove future large data centers from Virginia’s fast-track permitting process, and end state subsidies.
“This industry no longer has carte blanche to play by their own rules in Virginia,” Spanberger said when announcing the initiative.
Virginia’s Loudoun County — which is home to more than 250 data centers — has moved future projects to a special-exception process and is considering additional permitting and zoning changes.
While Maryland’s data center market is not at Virginia’s scale, opposition there has accelerated, with about half of its counties having adopted temporary moratoriums, according to Moore’s order. Harford County banned new data centers outright in June, while Prince George’s County in July enacted a two-year moratorium on hyperscale projects, and Montgomery County the same month approved an 18-month pause on reviews.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
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