Data center development will face tighter regulations across the Mid-Atlantic after officials in Virginia and Maryland unveiled new frameworks to corral 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.
In Virginia, the Prince William County Board of County Supervisors unanimously approved changes that largely end by-right data center development. The county 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. Virginia Gov. Abigail Spanberger also announced a broad "Data Center Accountability Framework" and signed Executive Order 22, directing state agencies to increase transparency, environmental oversight and scrutiny of the data center industry.
The regulatory shift signals a structural change in how large projects are approved. Spanberger said the industry "no longer has carte blanche to play by their own rules in Virginia." Her administration is proposing legislation for the 2027 session that would eliminate by-right approval for data centers using more than 25 megawatts of power, require local approvals, remove future large data centers from Virginia's fast-track permitting process, and end state subsidies. Moore said his administration will also seek to repeal Maryland's sales and use tax exemption enacted in 2020.
What remains unknown is how developers will respond to the loss of by-right approvals and state incentives, and whether local officials will use their new authority to block projects. The dossier does not specify timelines for the proposed Virginia legislation or the Maryland task force's evaluation criteria. Opposition in Maryland has accelerated, with about half of its counties adopting temporary moratoriums, but the long-term effect on data center supply in the Mid-Atlantic is not yet documented.