New Rules for Virginia Data Centers: What Developers Need to Know About EO 22 and the Accountability Framework

Summary — Virginia’s new Data Center Accountability Framework introduces significant changes to how large-scale data center projects are evaluated, supported, and regulated. The order immediately bans most new NDAs involving data center projects, limits certain state assistance for projects requiring 25 MW or more, and directs agencies to address environmental, energy, water, and community impacts. It also establishes an AI Task Force and outlines future measures involving local approvals, community benefits, natural gas generation, and clean-energy standards. Additional legislative and regulatory action is expected in the 2027 General Assembly session.

On September 18, 2026, Governor Abigail Spanberger signed Executive Order 22 (“EO 22”), establishing the Virginia Data Center Accountability Framework (the “Framework”). 

EO 22 is the most sweeping executive action on data center development in Virginia to date, imposing immediate restrictions on state economic development assistance, banning NDAs related to data center projects, launching environmental and community-impact initiatives, and creating a rapid-response AI Task Force. While many EO 22 provisions take effect immediately, the Governor has announced she will work with the General Assembly in the 2027 legislative session to codify these standards into permanent law and pursue additional legislative guardrails.

What EO 22 Does Right Now

Several provisions of EO 22 take effect immediately and carry direct consequences for developers and their state agency counterparts.

• Ban on Nondisclosure Agreements. No executive branch agency may enter into an NDA that prevents public disclosure of material information about a proposed data center development, including its public incentives, resource demands, or community impacts. Existing contractual commitments will be honored, but future NDAs are prohibited absent extraordinary circumstances such as national security.
• Exclusion from State Site-Readiness Programs. The Virginia Economic Development Partnership (VEDP) may not provide assistance through the Virginia Business Ready Sites Program, any expedited permitting program, or similar discretionary programs for new data center projects with anticipated peak electrical demand of 25 MW or greater.
• Community Engagement Toolkit (120 Days). The Office of the Chief Energy Officer must publish a Community Engagement Toolkit for local governments within 120 days, including model disclosure templates, impact-evaluation guidance, model approaches for voluntary and enforceable community-benefit agreements, and recommendations for planning, design, landscaping, buffering, and mitigation practices that reduce adverse impacts on neighboring communities.
• Cooling Water Scarcity. EO 22 designates the Eastern Virginia Groundwater Management Area as a cooling water scarcity area and directs the Virginia Department of Environmental Quality (DEQ) to expedite regulations for designating additional such areas.
• Agency Directives (180-240 Day Deadlines). EO 22 sets accelerated deadlines for several agency actions: 
  • DEQ must propose data center noise regulations and conduct a cumulative-impact review of diesel backup-generation operations, including measures to promote retrofit of Tier II generators to Tier IV or equivalent emissions controls, battery storage, fuel cells, and other non-diesel alternatives; 
  • Virginia Energy must identify responsible siting opportunities, including brownfield redevelopment, adaptive reuse, previously developed sites, edge data centers, and regional diversification, and evaluate potential grid reliability best practices such as ride-through and voltage protections;
  • The Chief Energy Officer must engage with utilities, the Virginia State Corporation Commission (SCC), and PJM Interconnection, L.L.C. (PJM) on cost allocation to shield households from data-center-driven infrastructure costs, as well as develop recommendations to support data center investment in methane emissions reductions associated with natural gas infrastructure; and
  • Virginia Works must develop workforce data collection criteria. 
• Interim Resource Adequacy Service (IRAS) Curtailment. The order also directs emergency curtailment procedures under PJM’s IRAS program for data centers that have not secured their own new generation capacity, with curtailment priority favoring those that bring clean energy or other beneficial investments.
• Affordable Community Energy Programs. EO 22 directs the Chief Energy Officer to identify strategies that direct data center investments into local energy projects that improve affordability for Virginia communities, with a focus on delivering household energy affordability benefits, expanding equitable access for low- and moderate-income families and historically disadvantaged communities, and strengthening local grid reliability in constrained areas.
• Governance. EO 22 designates the Office of the Chief Energy Officer as the primary lead for the Data Center Accountability Framework, centralizing data center policy oversight in a single office reporting to the Governor.

Policy Items Directed Toward Future Legislative and Regulatory Action

Unlike the provisions above, which take effect under existing executive authority, the following EO 22 directives depend on future legislative or regulatory action. They are designed to produce recommendations and frameworks that will likely inform proposals in the 2027 General Assembly session and beyond. None are law yet, but each signals where Virginia policy is heading.

• Elimination of By-Right Approval. The Framework calls for eliminating by-right approval and requiring local approval of any data center project exceeding 25 MW regardless of prior project approvals. This would significantly expand local government authority over large-scale data center development.
• Behind-the-Meter Natural Gas Restrictions. The Framework directs limiting on-site natural gas and behind-the-meter gas generation to the maximum extent practicable and closing loopholes that allow these emissions to bypass Virginia’s clean-air standards and avoid paying into the Regional Greenhouse Gas Initiative (RGGI). Operators that receive priority grid access and then fail to comply face a penalty of double the electricity consumption tax.
• VA-LEAD Designation Program. EO 22 directs development of the Virginia Local Energy and Accountable Data Centers (“VA-LEAD”) designation, a tiered scoring system modeled after LEED and EnergyStar. Facilities will be evaluated across several categories: energy and infrastructure impacts; water and land use; noise pollution; workforce development; clean-energy and resilience investments; sourcing of local sustainable construction materials; and local community benefits. The proposed criteria are due by year-end 2027 and will serve as the baseline for how the state allocates incentives and administrative support. Notably, the Framework envisions VA-LEAD as part of a broader strategy to prioritize grid access for data centers that meet heightened clean-energy standards, specifically, sourcing clean energy five years faster than required under the Virginia Clean Economy Act, reducing backup generator emissions by 60%, and limiting on-site natural gas generation to de minimis levels.
• Required Community Benefits Agreements. The Framework calls for requiring community benefits agreements between data center operators and local communities as part of development deals. While this will require future legislative action, developers should anticipate that localities will increasingly expect such agreements as a condition of project approval.
• AI Task Force Legislative Mandate. EO 22 directs the AI Task Force to “address the risks posed by AI through executive and legislative action,” including workforce displacement and data privacy. Developers should expect legislative proposals affecting AI governance and potentially the operations of AI-focused data center tenants.

AI Governance and the Rapid-Response AI Task Force

EO 22 creates the AI Task Force, co-led by the Chief Transformation Officer, Counsel to the Governor, and Secretary of Administration, supported by a newly established AI Policy Planning Unit within the Office of the Chief Transformation Officer. The Task Force’s mandate includes identifying cybersecurity risks from AI agents to state systems and critical infrastructure, coordinating with partners to harden systems against AI-based attacks, and engaging directly with frontier AI developers including Anthropic, OpenAI, xAI, Meta, Amazon, and Microsoft.

For more information, please contact Preston Lloyd, Brad Nowak, Chris McDonald, or any member of Williams Mullen’s Data Center Practice Group.