Long known as the data center capital of the United States, Virginia is becoming more selective about who gets the welcome mat.
Virginia Gov. Abigail Spanberger has cut off data center projects with anticipated peak demand of 25 megawatts or greater from state site development assistance and expedited permitting programs, via an executive order signed on Sept. 18. The move comes as public opposition to data center construction grows in the commonwealth and other parts of the country. Maryland Gov. Wes Moore, for example, also signed an executive order Wednesday on guardrails for data center development.
Spanberger’s order also bans Virginia agencies’ use of nondisclosure agreements to keep details about proposed data centers and their incentives confidential. It calls for new rules on noise, emissions, water use, electricity demand and other impacts over the next several months.
But many of the construction consequences aren’t known yet, said Ked Whitmore, chair of the land use and zoning practice at Venable, a Washington, D.C.-based law firm.
More changes will come into focus over the next few months as state agencies submit recommendations, according to a takeaways document from Venable. Spanberger also plans to pursue additional data center rules during Virginia’s 2027 General Assembly session, according to a release from her office.
Though the order itself does little to change current construction activity, Whitmore said what comes out of the recommendations could prove much more consequential for contractors.
Here, Whitmore talks with Construction Dive about what changes immediately, what contractors should watch for and whether the new rules could make projects more difficult to build in the future.
Editor’s note: The following has been edited for brevity and clarity.
CONSTRUCTION DIVE: What changes immediately for data center construction in Virginia due to the executive order?
KED WHITMORE: From a construction standpoint, I don’t know that it’s a ton of changes. Most of the changes that are going to impact construction are probably going to be the result of whatever the rulemaking process ends up saying at the end of the 120, 180 or 240 days.
I think most of the immediate impacts are going to be related to things like incentive agreements, NDAs, that sort of thing, not related necessarily to construction. I think most of the immediate changes are for things that are far earlier in the process.
How could the order eventually affect construction activity or project timelines?
There's going to be a significant review around a lot of things that impact design, around noise, around emissions, around water and cooling and around where these things can be built overall. That stuff is going to have a huge impact on how the buildings are designed, particularly how the generators and other ancillary structures are designed.
There is this exclusion from the state site readiness and expedited review program, but again, that doesn't really impact the construction itself. That impacts some of the permitting and getting through some of the processes, but I don't think that that's a literal construction change.
What should contractors and developers with data center projects in Virginia be doing now?
Developers need to understand where each of their sites are in the permitting process, so that they can evaluate where and how these changes are going to line up with future milestones.
And that's a tricky question, because the changes aren't really going to come into focus for a couple of months.
It's going to require developers to be very cognizant of what milestones they need to achieve and how those might be impacted by the legislative changes that are sure to come next year.
Do you expect the executive order to alter Virginia’s data center construction pipeline?
There is still a lot to be understood about what the impacts are going to be, and those impacts are going to be more clear when we get the agency reports back in a couple of months.
Then I think significant changes are going to take place during the general assembly session in 2027. I think that's really where you're going to see the changes crystallize, and those impacts will start to become clear at that point.
It's too much to say that it's going to limit or prevent data center construction from taking place. We don't know what a lot of these impacts are going to be. It may be that hopefully the state comes up with some really common sense, good guidelines and procedures that take into account the constraints the industry has and will allow for this development to continue, but with guardrails that the state thinks are appropriate.
It's also possible that the agencies and the general assembly could make changes to the law that are untenable, that make data center development much more difficult. I don't know the answer to that, but I think characterizing this as “they are stopping data center development,” I don't think that's accurate, at least not at this point.
