Key Takeaways
- Executive Order 22 bans nondisclosure agreements on data center deals, targets noise and emissions, and designates Eastern Virginia a cooling-water-scarcity area.
- Loudoun County is expected to pause new data center and certain substation approvals for up to 12 months and potentially remove grandfathering provisions for data centers, while Prince William County moved to end by-right development almost entirely.
- Developers should evaluate vested rights positions now before grandfathering windows close and new discretionary review requirements take effect.
- Further regulatory action — including a potential statewide moratorium and changes to Virginia’s sales and use tax exemption — remains on the table heading into the 2027 session.
Within days of each other, several governmental actions regarding data centers took place in Virginia. Gov. Abigail Spanberger signed an aggressive data center accountability order; Loudoun County voted to move toward freezing new data center and certain substation approvals for up to a year, while also considering revoking grandfathering for pending data center applications; and Prince William County moved to eliminate almost all by-right development.
For data center developers, operators and capital partners active in Virginia, these actions carry immediate consequences. Project timelines are at risk. Entitlement strategies will need to be revisited. Vested rights questions are becoming urgent, and the cost of doing business in Virginia is poised to rise. Understanding what changed — and what comes next — is essential to protecting current investments and positioning for future growth.
Spanberger Signs Executive Order 22
On Sept. 18, 2026, Spanberger signed Executive Order 22 and unveiled the Virginia Data Center Accountability Framework, which her administration calls “the most comprehensive and aggressive data center accountability effort in the country.” The executive order implements only limited immediate measures. The Framework is a blueprint, not a self-executing resolution, and will require legislative and regulatory follow-through.
The order takes immediate action on several fronts. It bans executive branch agencies from entering into nondisclosure agreements on data center projects, effectively ending a common industry practice that shielded deals from public scrutiny. It also directs the expedited development of state noise regulations for data centers, orders a thorough review of diesel backup generation emissions and their localized air-quality impacts, and designates Eastern Virginia as a “cooling-water-scarcity area” subject to enhanced water-use oversight.
Beyond the executive order, the broader Framework consists of proposed legislation for the 2027 General Assembly session. It would eliminate by-right approval for any data center using more than 25 megawatts, end state subsidies for data centers in Virginia’s site development programs, remove large data centers from the state’s fast-track permitting process and require utilities to equitably allocate transmission and generation costs.
These proposals would also require agency rulemaking, regulatory guidance and, in some cases, additional executive directives before they could take effect. The governor also established Virginia’s first Artificial Intelligence Task Force to address workforce displacement, data privacy and cybersecurity risks. Many of these proposals are prospective, applying primarily to new data centers. Bringing existing facilities and projects already in the pipeline into compliance would be a separate, longer-term effort.
The Debate Is Not Over
The Framework has drawn criticism from environmental advocates, community groups and legislators on both sides of the aisle who argue that it does not go far enough. Significant pressure for a statewide moratorium on new data center development continues, but the executive order does not include one. A legislative subcommittee is currently studying data center impacts, with recommendations expected for the General Assembly later this year, so further regulatory action remains squarely on the table.
Local Governments Actions
The state-level action follows — and in some cases, parallels — an accelerating wave of local regulatory activity.
Loudoun County, home to more than 230 data centers and the epicenter of “Data Center Alley,” voted on Sept. 15, 2026, to move toward pausing board action on legislative data center and certain substation applications for up to 12 months. A formal resolution is expected in October. In addition to data centers, Loudoun County is moving to pause approvals on direct serve substations, while retaining the right to approve grid reliability substations. The county had already ended by-right data center development in March 2025 and is undertaking a comprehensive review of its zoning ordinance and comprehensive plan for data center standards. As part of that previous zoning action, the county adopted grandfathering provisions for pending data center applications. The board is expected to revisit that prior grandfathering at its early October meeting.
Prince William County on Sept. 22, 2026, voted unanimously (8-0) to approve a zoning text amendment that largely eliminates by-right data center development countywide. All future data center projects not meeting certain criteria will now require a special use permit, with a 90-day grace period for developers to file applications before the new rules take effect.
Amherst County supervisors voted in June to pursue zoning changes that would require special use permits for data centers in the industrial district — where they were previously allowed by right — amid strong community opposition.
Frederick County may become the first locality in the state to remove data centers entirely from its zoning ordinance. The Planning Commission recommended denial of two recent data center proposals, and in September, it unanimously recommended an ordinance amendment that would eliminate data centers as a permitted or conditional use in all zoning districts.
Other localities, including Stafford County, are seeing increased data center interest as traditional Northern Virginia markets tighten — bringing new siting and infrastructure debates to communities that have not previously grappled with the industry at scale.
Vested Rights: The Critical Question
As zoning frameworks shift across multiple jurisdictions simultaneously, one issue rises above all others for developers with projects in the pipeline: whether and when development rights have vested. In Virginia, vesting typically requires significant affirmative governmental acts — such as approved site plans or filed plats — and the standards can vary by locality. With Loudoun County’s application pause, Prince William County’s overlay reduction and restrictions and Frederick County’s potential removal of data centers from its zoning ordinance, projects at various stages of entitlement face materially different outcomes depending on the status of their approvals. Developers should be evaluating their vesting positions now before grandfathering windows close and new discretionary review requirements take effect. Given the continuing uncertainty, calls for a moratorium from environmental advocates and legislators across party lines, and the prospect of stricter legislation in 2027, vested rights are a critical business safeguard. Developers should not assume that today’s regulatory environment represents the floor.
McGuireWoods and McGuireWoods Consulting have deep experience guiding data center clients through Virginia’s evolving regulatory landscape. Our team advises developers, operators, and technology companies on land use and zoning, environmental permitting, energy and utility matters, government relations, and complex real estate transactions across the Commonwealth. For assistance navigating a new entitlement in a shifting local market, evaluating the implications of the governor’s accountability framework for an existing portfolio, or other questions, contact McGuireWoods Consulting or a member of McGuireWoods’ Data Centers Practice Area.
