Data centre development in the Mid-Atlantic region will be subject to stricter regulations after officials in Virginia and Maryland unveiled new frameworks to regulate the industry's intensive growth. This comes against a backdrop of increased public and political scrutiny.
Maryland Governor Wes Moore announced an executive order establishing a review process for data centres of 25 megawatts or more. This process will become relevant once developers apply for state permits, incentives, or letters of support. The order also provides for the establishment of a working group to evaluate projects based on their impact on electricity customers and the power grid. Governor Moore stressed that local authorities will continue to have the ultimate decision on project approval. Projects that do not comply with the new framework may experience delayed state review and will not be eligible for state support or certain incentives. Moore's administration also intends to repeal the sales and use tax exemption for Maryland, which was introduced in 2020.
Regulatory Initiatives in Virginia
A day earlier, the Prince William County Board of Supervisors in Virginia unanimously approved changes that largely end the automatic approval (by-right development) of data centres. Prince William County, one of the country's largest data centre locations, will reduce its 'Data Center Opportunity Zone Overlay District' from 9,698 acres to approximately 3,641 acres. New projects outside this revised area will now require a special permit process. The county had established the 'Overlay' in 2016 to encourage data centre development near high-voltage power lines. Prince William's own planning documents describe the zoning change as a structural shift from the county's previous approach to approving new data centres.
Last week, Virginia Governor Abigail Spanberger also introduced a comprehensive 'Data Center Accountability Framework' and signed Executive Order 22. This directs state agencies to immediately increase transparency, environmental oversight, and control of the data centre industry. In parallel, her administration plans legislation for the 2027 session that would abolish automatic approval for data centres consuming more than 25 megawatts of electricity. The legislation would mandate local permits for projects, exclude future large data centres from Virginia's fast-track approval process, and end state subsidies. Governor Spanberger stated when presenting the initiative: 'This industry no longer has carte blanche to operate on its own terms in Virginia.'
Loudoun County in Virginia, home to more than 250 data centres, has subjected future projects to a special exception permit process and is considering additional permitting and zoning changes. Although Maryland's data centre market does not reach the scale of Virginia's, resistance there has accelerated. According to Moore's order, about half of the counties have imposed temporary moratoriums. Harford County completely banned new data centres in June, while Prince George's County issued a two-year moratorium on hyperscale projects in July, and Montgomery County approved an 18-month review pause in the same month.
