Virginia Governor Abigail Spanberger has unveiled a package of new standards and proposed restrictions on data centers, seeking to curb the environmental and economic costs of the massive facilities that support AI computing.
Announced September 18, the governor’s Data Center Accountability Framework includes new oversight of power generation, water use and noise pollution. It also proposes restrictions on non-disclosure agreements that have limited public access to information about data center development.
The initiative is part of a dramatic policy shift for Virginia, which hosts the world’s largest concentration of data centers. Northern Virginia has become a global hub for cloud computing infrastructure, attracting vast investment from tech companies.
Yet the industry’s expansion has created concerns among Virginia residents about electricity prices and the impact of large facilities on local communities. “Community members are demanding action,” Spanberger said.
The governor’s initiative combines executive actions that can begin immediately with legislative proposals that require approval during Virginia’s 2027 legislative session. Spanberger has also established an AI task force to examine the technology’s development and its impact on the state.
Concern About Energy Infrastructure
A key part of Virginia’s shift is a move toward greater oversight of the energy infrastructure supporting data centers. Spanberger is proposing limits on on-site natural gas generation while offering incentives for developers to invest in renewable energy sources, including solar and wind power.
These measures are designed to secure enough electricity to operate computing facilities without adding excessive costs for other electricity customers. Under the proposed framework, non-disclosure agreements would be prohibited for commercial data center projects, while facilities requiring more than 25 megawatts of electricity would be subject to local approval. The measures would give communities greater access to information about proposed developments.
Virginia will also push forward noise regulations and the designation of cooling-water scarcity areas, bringing additional scrutiny to the water resources needed to keep computing equipment operating.
Data Center Tax Breaks Remain Contentious
Earlier this year, lawmakers from both parties sought to eliminate tax incentives that have helped attract technology companies to the state. Spanberger opposed repealing those benefits, arguing that withdrawing existing commitments could damage Virginia’s reputation among businesses considering investments.
The resulting budget agreement established a temporary electricity consumption tax on data centers, with general-fund revenue from the tax capped at $600 million per fiscal year. A legislative panel will also examine the industry’s subsidies and make recommendations for 2027.
Nicole Riley, director of Virginia government affairs for the Data Center Coalition, warned that major policy changes introduced without sufficient industry consultation could undermine investment and economic development. The Natural Gas Coalition of Virginia also raised concerns about proposed restrictions on gas-powered electricity generation.
Virginia’s shift is similar to those happening across the U.S. Governors in Pennsylvania, Texas and New York have pursued measures addressing data center expansion. Nevada Governor Joe Lombardo also announced restrictions on data centers seeking state tax incentives on September 18.