A New Era for Data Centers in Virginia: Understanding Executive Order 22 and What Comes Next

Governor Abigail Spanberger created “the most comprehensive and aggressive data center accountability framework in the country” with the stroke of a pen on September 18, 2026. Executive Order 22 (EO 22) establishes the Virginia Data Center Accountability Framework and the rapid-response Artificial Intelligence (AI) Task Force, and outlines a comprehensive statewide policy organized around five core pillars: community transparency, environmental protection, energy affordability, clean energy and grid reliability, and workforce development.

Although portions of the Executive Order were enacted immediately, a majority of the EO22 and Data Center Legislative framework will require legislative approval, EO 22 introduces immediate restrictions on specific state administrative processes, establishes a schedule of 120- to 240-day directives for state agencies, and proposes a legislative agenda for the 2027 General Assembly session.

Immediate Executive Requirements

EO 22 contains several mandates taking immediate effect, directly impacting how state agencies interact with data center developers:

• Limitation on Nondisclosure Agreements (NDAs): Executive branch employees are now strictly prohibited from entering into NDAs concerning proposed commercial data center developments. This includes details regarding public incentives, resource demands, and potential community impacts. While existing contractual commitments will be honored, new NDAs may be permitted only under limited exceptions, such as matters of national security.

• Exclusion from Expedited State Programs (25 MW Threshold): The Virginia Economic Development Partnership (VEDP) is prohibited from assisting new data center projects with an anticipated peak electrical demand of 25 megawatts (MW) or greater through the Virginia Business Ready Sites Program, expedited permitting programs, or similar discretionary state site-readiness initiatives.

• Cooling Water Scarcity Designations: The order designates the Eastern Virginia Groundwater Management Area, which includes Hampton Roads and much of Virginia's coastal plain, as a "cooling water scarcity area." Furthermore, the Virginia Department of Environmental Quality (DEQ) is directed to expedite the development of criteria to identify and designate additional water scarcity areas. DEQ is also directed to propose a timeline and workplan for the “cooling water scarcity area rule.” This provision has no material effect until such regulatory processes are completed. Based on the 180-day directive, DEQ is required to submit a workplan by March 17, 2027.

• PJM Emergency Curtailment Protocols: EO 22 directs the Office of the Chief Energy Officer to establish emergency curtailment procedures under the PJM Interconnection, L.L.C. (PJM) Interim Resource Adequacy Service (IRAS) program. These procedures apply to data centers that have not secured their own independent new generation capacity. Curtailment priority will favor facilities that bring clean energy or other beneficial infrastructural investments to the Commonwealth.

• Grid Reliability: Virginia Energy must evaluate grid reliability best practices, including establishing requirements for ride-through capabilities and voltage protections.

• Local and Sustainable Procurement: The Department of Forestry must develop local and sustainable procurement standards.

• Affordable Community Energy Programs: The Chief Energy Officer must identify strategies to direct data center investments into local energy projects that deliver household energy affordability benefits for low- and moderate-income families.

120- to 240-Day Interagency Directives

EO 22 designates the Office of the Chief Energy Officer to lead the implementation of the Data Center Accountability Framework. Over the next six to eight months, specified state agencies must complete the following deliverables:

• 120-Day Deadline – Community Engagement Toolkit: The Office of the Chief Energy Officer must publish a Data Center Planning and Community Engagement Toolkit designed for local governments. This toolkit will provide model disclosure templates, guidance for evaluating project impacts (including electricity demand, water use, air emissions, noise, and traffic), model approaches for voluntary community-benefit agreements, and siting and landscaping best practices. This directive must be completed by January 16, 2027.

• 180-Day Deadline – Noise Regulations: DEQ must expedite data center noise regulations and submit accelerated rulemaking timelines, consistent with DEQ’s existing statutory authority and applicable legislative direction. This directive must be completed by March 17, 2027.

• 180-Day Deadline – Methane Emissions: The Chief Energy Officer, DEQ, and Virginia Energy shall develop and deliver recommendations to support data center investment in methane emissions reductions. This directive must be completed by March 17, 2027.

• 180-Day Deadline – Backup Generation Review: DEQ, the Department of Health, and Virginia Energy must conduct a cumulative-impact review of diesel and other backup generators. Agencies must report findings and permitting recommendations to the Governor, evaluating measures to promote the retrofitting of existing Tier II generators to Tier IV emissions controls, battery energy storage, and hydrogen fuel cells. This directive must be completed by March 17, 2027.

• 180-Day Deadline – Workforce Reporting: Virginia Works is tasked with developing reporting criteria for local workforce opportunities and project-level workforce data. This directive must be completed by March 17, 2027.

• 180-Day Deadline – Responsible Siting: Virginia Energy shall consult with stakeholders to identify development opportunities that minimize environmental impacts. Recommendations must focus on brownfield redevelopment, adaptive reuse, previously developed sites, and edge/distributed data centers. This directive must be completed by March 17, 2027.

• 240-Day Deadline – Responsible Siting: Virginia Energy is directed to submit recommendations based on the aforementioned stakeholder consultation with findings, recommended best practices, and actions to support lower-impact, community-aligned development. This directive must be completed by May 16, 2027.

Long-Term Initiatives: VA-LEAD and the AI Task Force

• The VA-LEAD Designation Program: The Office of the Chief Energy Officer will develop the Virginia Local Energy and Accountable Data Centers (VA-LEAD) program. Modeled after frameworks like LEED and Energy Star, VA-LEAD will serve as a tiered scoring system evaluating energy impacts, water and land use, noise, clean energy, and community benefits. Proposed criteria and an implementation plan are due to the Governor by the end of 2027. Once active, the highest-tier facilities will receive priority for state incentives and expedited administrative services.

• Rapid-Response AI Task Force: Addressing the infrastructural demands of artificial intelligence, EO 22 creates an AI Task Force co-led by the Chief Transformation Officer, Counsel to the Governor, and Secretary of Administration. The task force is directed to pursue action on AI-driven workforce displacement, data privacy risks, and cybersecurity threats to state systems and critical infrastructure.

The 2027 Legislative Agenda

EO 22 operates within the limits of executive authority – it does not override local zoning authority or enact a statewide moratorium. Rather, it establishes the foundation for legislative action. Governor Spanberger has expressly stated her intent to seek legislation during the 2027 General Assembly session to codify these standards:

• Zoning and Approval Processes: A primary component of the 2027 agenda is the proposed elimination of "by-right" approvals for large data centers (25 MW or greater). The administration seeks to mandate public hearing and local legislative approval processes for facilities meeting this threshold.

• Cost Allocation and Ratepayer Protection: State officials will engage with utilities, the State Corporation Commission (SCC), and PJM to pursue cost allocation reforms. The legislative goal is to shield residential households from infrastructure costs driven by data centers, including exploring the allocation of PJM Reliability Backstop Procurement costs directly to causative data center loads.

• Methane Reductions: The administration will also develop recommendations supporting data center investments in methane emissions reductions associated with natural gas infrastructure.

We will continuously monitor the progress of the 120-, 180-, and 240-day agency deliverables.