Virginia moves to give communities more say on data centers
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Gov. Spanberger's sweeping new data center restrictions could reshape where facilities are built, what developers pay and how much say communities get.
Why it matters: The plan significantly expands Virginia's efforts to manage the growth of the power-hungry facilities in the nation's data center capital.
State of play: The new framework combines an executive order taking effect now with a broader agenda Spanberger wants lawmakers to take up when they return in January.
What changes now:
- State officials are banned from signing confidentiality agreements for data center projects.
- Big new data centers — those that use 25 megawatts or more — will lose access to some state perks, including site readiness help and fast-track permitting.
- New noise and water rules are being fast-tracked, with DEQ given 180 days to lay out an accelerated plan.
- Localities will get a "tool kit" to help them negotiate stronger deals with data center developers.
- The state will develop new guidelines aimed at getting more local workers into data center jobs and training programs.
- The state will look for ways to steer data center investment into local energy projects aimed at affordability and grid reliability.
Plus: The order creates a state AI Task Force focused on workforce displacement, privacy and cybersecurity.
Context: The confidentiality provision only applies to state officials for now. Extending it to local officials requires General Assembly action, the Washington Post reports.
- But they've been widely used at the local level, per the Virginia Mercury, which found data center NDAs used by 25 of 31 localities it reviewed last year.
- Case in point: Goochland signed NDAs with Tract for its proposed Tuckahoe Technology Park center more than six months before the developer publicly filed plans.
What could come next: Much of the governor's framework requires legislation or regulatory action. Among the changes she's seeking:
- Require local approval for data centers using more than 25 megawatts, eliminating by-right approval development for those projects.
- Require community benefit agreements so residents near data centers see "tangible benefits" from the projects.
- Push data centers to hire and train more local workers through hiring goals, apprenticeships and stronger labor standards.
- Make data centers pick up more of the tab for new transmission and generation infrastructure, and require developers to make stronger financial commitments up front.
- Set tougher statewide standards for data centers' water and energy use.
Yes, but: Senate President Pro Tem Louise Lucas — who chairs the powerful Senate Finance Committee — criticized the plan for retaining Virginia's data center sales tax exemption.
- She said she plans to pursue more substantial legislation in 2027.
The other side: The Data Center Coalition said Friday it shares Spanberger's goals but warned that "significant and abrupt policy changes" could jeopardize jobs and investment.
- The industry group also disputed the idea that data centers are currently sticking Virginians with their costs, pointing to a 2024 JLARC study that found that the industry was then paying its full cost of service.
What we're watching: How much of Spanberger's framework becomes law when the General Assembly returns next year.