Governor Abigail Spanberger of Virginia signed an executive order on September 18 that bars state agencies from signing confidentiality agreements on data center projects and tightens the approval process for new facilities, part of a package her office called the most aggressive data center accountability framework in the nation. The order, Executive Order 22, does not halt construction, but it changes the terms on which the state’s most prominent industry does business with its government.
Virginia is the densest data center market in the world. Loudoun County, in the northern part of the state, has been described for years as “Data Center Alley,” and the state hosts more of the facilities that power the internet and, increasingly, artificial intelligence than any other place on earth. That concentration has made data centers an economic pillar for Virginia and a source of rising friction with the residents who live near them.
The order’s central provisions target the opacity that has surrounded the industry’s growth. State executive agencies will no longer be permitted to sign nondisclosure agreements covering data center projects, a practice that had kept the details of siting, tax arrangements, and environmental commitments out of public view. The order also directs the state to move quickly on noise regulations, to review the use of diesel backup generators, and to convene a working group on AI that will assess job displacement, data privacy, and cybersecurity risks.
The framework goes further in its attempt to reshape how projects are approved. It proposes eliminating the automatic approval process that Loudoun County and other localities have used for years, removing some state subsidies for the industry, and adding environmental safeguards. It also directs the state to protect residents from bearing the cost of data center electricity demand, a concern that has grown as utilities warn that the industry’s power needs will push up rates for everyone.
Spanberger framed the order as a rebalancing rather than a reversal. The state has depended on data center tax revenue to fund services, and the industry has argued that its growth is the reason Virginia can keep taxes low elsewhere. The governor’s order accepts the industry’s presence but insists that its expansion be subject to the same scrutiny and public accountability as any other large-scale development, a position that has been building in the counties where opposition is loudest.
What the order does not do is as significant as what it does. It does not stop new construction, and it does not touch the tax exemptions that data center operators have long enjoyed, the provisions that matter most to the industry’s economics. The harder decisions, including whether to scale back those exemptions, have been left to the state legislature when it convenes in 2027, a timeline that gives both sides time to organize.
The politics of the issue cut across the usual lines. Local officials in Loudoun and elsewhere have faced pressure from residents over noise, power, and land use, while state-level policymakers have weighed that pressure against the revenue and jobs the industry brings. Spanberger, a Democrat, has positioned herself between the two, endorsing continued growth while imposing the accountability measures that residents have demanded.
The electricity question is the sharpest edge of the whole debate. Data centers consume power at a scale that is beginning to reshape the grid, and utilities have proposed new generation and transmission to serve them. Who pays for that expansion, the industry or the ratepayers, is the question the order gestures at and the legislature will ultimately have to answer, and it is a question every data center-heavy region in the country is now asking.
The order’s AI working group reflects a recognition that the next phase of data center growth will be driven by artificial intelligence, and that the risks of that phase extend beyond noise and power. Job displacement, data privacy, and cybersecurity are the concerns the group is charged with assessing, a list that frames data centers not as warehouses for servers but as infrastructure for a technology whose consequences are still being worked out.
The industry’s defenders argue that data centers are the cleanest economic development a locality can attract, employing few people but paying enormous property taxes, and that Virginia’s prosperity is inseparable from them. The order’s supporters respond that the costs, in noise, water, land, and grid strain, are borne by people who never consented to them, and that secrecy about the terms of each project is how those costs were hidden for as long as they were. The framework is an attempt to make the trade visible.
Virginia’s experiment will be watched closely, because the state is where the tensions the rest of the country is beginning to feel are most concentrated. If the framework produces a workable set of rules for governing an industry the state depends on, other states will copy it. If it collapses under political pressure from either side, the message will be that data center growth is too economically valuable to regulate, and the residents who live next to it will keep losing the argument.
