Maryland Governor Wes Moore issued an Executive Order ("EO") on September 23 establishing a new statewide framework for the review of large data center projects, generally those with a projected or actual peak electric demand of 25 megawatts or more and facilities qualifying as a Large Load Customer under Maryland utility law. The EO creates a new Maryland Data Center Accountability Task Force that will evaluate projects against state-established energy, economic, community, environmental, and transparency criteria. The Task Force criteria establish a significant new layer of state review for large projects seeking state permits, incentives, infrastructure assistance, or other discretionary state action.
Projects will be evaluated under five broad principles:
- Ratepayer and Grid Protection. Developers will be evaluated on matters including their plans to satisfy incremental energy demand without shifting costs to other ratepayers, payment of infrastructure costs, and willingness to participate in curtailment or flexible-load programs.
- Economic Benefit for Marylanders. The State will consider construction and permanent employment, wages and benefits, local hiring and apprenticeship programs, workforce investments, and the project's net fiscal impact.
- Community Voice. The Task Force will consider early engagement with the host jurisdiction and residents, potential community benefits agreements, and whether a project is consistent with the jurisdiction's comprehensive plan and zoning.
- Environmental Protection. Review will encompass water availability, cooling technology, and backup-generator emissions, along with stormwater, Chesapeake Bay, and other impacts.
- Transparency and Accountability. Developers will be expected to disclose ownership and certain tenant information and to make project commitments publicly available and subject to ongoing reporting.\
Impact on Land Use and Development Approvals
Under the new review process, developers will be invited to submit a Statement of Commitments addressing the five principles. Based on the review, the Task Force will designate projects under one of three categories: Aligned, Conditionally Aligned, or Not Aligned.
Aligned or Conditionally Aligned projects become eligible for a Coordinated Review Pathway that speeds up state agency reviews concurrently with the local permitting process and for discretionary incentive, grant, loan, and financing awards.
Not Aligned projects and those that refuse Task Force review will have all substantive state review deferred until the developer documents all required local land-use approvals, consistency with the local comprehensive plan, and any required water-appropriation or wastewater-discharge authorization. Such projects also will not receive state facilitation, letters of support or advocacy, or discretionary state incentives. Overall, while this new framework does not impact local project approvals, it effectively creates a procedural and timing incentive for projects to align with the state-issued criteria.
Implications for Real Estate and Development
- Public Disclosure Requirements Will Increase. The EO calls for creation of a public Maryland Data Center Dashboard expected to disclose information about project location, developers, tenants, projected peak electrical demand, water use, and more.
- No New Non-Disclosure Agreements. Executive agencies are now prohibited from entering into or renewing NDAs with data center developers concerning proposed or existing projects, although existing agreements will be honored until expiration.
- State Environmental Review May Become More Demanding. The inclusion of environmental protections as a standalone evaluation principle suggests that developers should be prepared to address water use, air quality, noise, and natural resource impacts as part of the state review process.
- Incentive for Community Engagement. The inclusion of community voice as one of the five evaluation principles signals that data center developers should proactively engage with affected communities early in the development process. Projects that lack meaningful community input may risk a negative determination, potentially complicating efforts to secure state permits or incentives.
- Tax Incentive Landscape May Shift. Although separate from this EO, Governor Moore will continue seeking repeal of the 2020 sales and use tax exemption, which would roll back a key financial incentive that has been part of Maryland's data center attraction strategy. Developers with projects currently relying on this exemption should evaluate the potential fiscal impact.
- No Statewide Moratorium but Local Pauses Remain in Effect. While the EO does not impose a statewide moratorium, multiple Maryland counties continue to enforce local moratoriums on data center development.
Impact on Existing Projects
The Order includes an important prospective-application provision, but it is not a blanket grandfathering provision for projects already in development. In order to move forward under previous laws and procedures, an application for a state permit or approval must have been submitted on or before September 23 and determined by the agency to have been administratively completed. Developers should expect that applications for any new state permits, approvals, incentives, expansions, or other discretionary state involvement, even for projects already underway, will be evaluated under the new review process.