Virginia Governor Abigail Spanberger issued Executive Order 22 ("EO") on September 18 establishing statewide data center policy. The EO directs executive-branch agencies to increase transparency and community engagement, strengthen environmental protections, address energy costs and grid reliability, and promote workforce and local economic benefits. It also limits certain discretionary state programs for new projects with anticipated peak electrical demand of 25 megawatts or more.
The EO does not create a statewide moratorium or change local zoning rules but will likely affect the permitting process, particularly in the environmental context. In addition, it sets the table for significant changes in land use regulations by the General Assembly in 2027.
Implementation will focus on five areas:
- Transparency and Community Engagement. State executive agencies generally may not enter into, require, or enforce new NDAs that prevent disclosure of material information about proposed data centers, incentives, resource demands, or community impacts. Existing commitments remain in place. The State also will prepare model disclosure and community-engagement guidance.
- Environmental Protection. DEQ must develop accelerated workplans for data center noise and water regulations and review cumulative impacts from backup generators, including possible changes to permitting, monitoring, emissions controls, and public disclosure.
- Ratepayer and Grid Protection. State officials must engage utilities, the State Corporation Commission, PJM, and other stakeholders on cost allocation, ratepayer protection, grid reliability, and potential curtailment arrangements for large-load customers.
- Responsible Siting. Virginia Energy will develop recommendations addressing brownfields, adaptive reuse, regional diversification, reclaimed water, waste heat, clean-energy investment, and impacts on scenic and historic resources.
- Workforce and Economic Benefits. The EO directs agencies to develop workforce-data, local hiring, apprenticeship, procurement, and community-benefit practices associated with data center investment.
Impact on Land Use and Development Approvals
The EO relies principally on the Governor's authority to direct executive-branch policy and require agency reports under Article V of the Virginia Constitution and Virginia Code SS 2.2-103 and 2.2-110. It supports agency coordination and control over discretionary state assistance but does not amend local zoning ordinances, eliminate by-right development, require community-benefit agreements, or establish final environmental standards.
Effective immediately, the Virginia Economic Development Partnership may not provide assistance through the Virginia Business Ready Sites Program, expedited permitting programs, or similar discretionary state programs to a new data center project with anticipated peak demand of 25 megawatts or more. The EO does not prohibit such projects, but loss of state facilitation may lengthen schedules and increase coordination burdens.
Key dates include a planning and community-engagement toolkit within 120 days; DEQ workplans and studies within 180 days; responsible-siting recommendations within 240 days; and proposed VA-LEAD criteria by December 31, 2027. It is likely that these reports will be followed by legislative changes by the 2027 General Assembly.
Implications for Real Estate and Development
- Entitlement and Schedule Risk Will Increase. Developers, lenders, and equity partners should revisit permit matrices, appeal periods, outside dates, and construction schedules, particularly where underwriting assumed expedited state review or other discretionary assistance.
- Load and Phasing Require Closer Review. Due diligence should include a utility-supported peak-demand schedule by phase, building, tenant, meter, and interconnection point. Parties should not assume that phasing, separate ownership, or multiple parcels will avoid the 25-megawatt threshold.
- Environmental and Capital Costs May Increase. Budgets should include contingencies for enhanced noise mitigation, cooling systems, backup-generation controls, monitoring, and potential design changes as agencies develop new standards.
- Financing Documents Should Allocate Regulatory Risk. Funding conditions may address final land-use and environmental approvals, expiration of appeal periods, acceptable utility arrangements, and funded mitigation measures. Covenants, reserves, and sponsor support should cover regulatory changes, utility delays, and resulting cost overruns.
- Public Disclosure Requirements Will Increase. Project parties should segregate trade-secret, security-sensitive, and critical-infrastructure information and identify statutory protections rather than relying solely on broad NDAs. Existing contractual confidentiality commitments remain in place.
- Utility and Community Commitments Will Matter More. Lenders and investors should examine minimum-payment, collateral, curtailment, and service obligations in utility agreements and budget for early community engagement and potential community-benefit commitments.
Impact on Existing Projects
The EO does not contain a complete grandfathering rule. Existing NDAs and contractual commitments are honored, but the order does not clearly resolve treatment of projects already approved, under development, or participating in state programs. Existing approvals may support vested rights but may not shield a project from generally applicable requirements concerning air emissions, noise, water use, utility service, or grid reliability.