Governors Join the Fray: Virginia and Maryland Executive Orders Escalate the Data-Center Backlash
The regulatory backlash moved up a level of government this month: within five days, the governors of the two most data-center-exposed Mid-Atlantic states signed executive orders imposing state-level accountability frameworks on the industry — on top of the PUC tariff and legislative wave already tracked in this topic.
Virginia (Gov. Abigail Spanberger, Sept 18, 2026). Billed as "the most comprehensive and aggressive data center accountability effort in the country," the order proposes legislation to end by-right approval and require local approval of any data center over 25 MW, removes future large data centers from the state's fast-track permitting process1, bans executive-branch participation in NDAs with data center businesses, sets water-use standards, and limits on-site generation and on-site natural gas. Spanberger: "These standards are high. And moving forward, it's pretty simple. If you don't want to meet these high standards, Virginia may not be the place for you." Most items require 2027 General Assembly legislation to take effect. The order lands on top of the June 2026 budget compromise that enacted the nation's first statewide data-center electricity consumption tax — $0.011/kWh from July 1, 2026, capped at $600M/year — while leaving the sales-and-use tax exemption (worth ~$1.9B in 2025 per the state tax department) intact through its 2035 sunset. Senate President Pro Tempore Louise Lucas called even this insufficient: "The governor is finally feeling the heat but still ignoring the fire."
Maryland (Gov. Wes Moore, Sept 23, 2026). Any data center over 25 MW must now undergo state review with a public records process, judged on five principles — ratepayer and grid protection, economic benefit, community voice, environmental protection, transparency — with a monthly public dashboard and written determinations of "aligned, conditionally aligned, or not aligned." Moore paired the order with a vow to repeal the state's data center tax exemption: "Data centers have got to pay their own way. They need to pay their own way or they need to go away."
The multistate picture. An Ashurst/Perkins Coie review of Q2 2026 executive actions counts ten states intervening in one quarter: New Jersey's Data Center Fair Share Act (signed July 7) creates a new ratepayer class requiring ≥50 MW data centers to pay their own grid costs and curtail before residential ratepayers during grid strain; Pennsylvania's GRID standards make tax exemptions merit-based; Ohio (DeWine, May 27) and Illinois (Pritzker, June 5) administratively froze new data center tax-incentive approvals; New York's legislature passed a one-year permit moratorium for 20 MW+ projects that Gov. Hochul has signaled she opposes; while Michigan courting the same industry with OpenAI's $16B "Stargate" campus. The review's conclusion: "nearly all governors have placed utility ratepayer protection at the center of their policy justifications... a marked retreat from public grid subsidies for big tech, replacing them with strict 'developer-pays' philosophy."
Investment read-through. Virginia is Dominion's (D) core jurisdiction and the largest data center market in the world; the EO plus the consumption tax plus the pending NextEra merger review (NextEra–Dominion Merger: Lt. Gov. Hashmi Opposes as SCC Hearings Draw Overwhelming Public Opposition) stack three layers of state-level risk on the same utility in six months. Maryland's order adds friction to the PJM-adjacent buildout (Maryland Challenges PJM Transmission Cost Rules Over $2B Data Center Cost Shift). The direction of travel is uniform: the cost of AI load is being contractually and statutorily pushed onto the load itself.
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An instance of Local environmental vetoes and permitting moratoriums are the ultimate gatekeepers of data center construction. — Executive orders end by-right approval, strip fast-track permitting, and impose moratoria across ten states, making state approval — not capital or demand — the binding gate on multi-billion-dollar builds. ↩︎