Virginia Gov. Abigail Spanberger (D) announced a set of policies Friday aimed at controlling the rampant development of data centers, but stopped short of the moratorium that some in her party have sought.
The plan “is about delivering a better deal for Virginians,” Spanberger said at a morning news conference, in which she promised to confront one of the thorniest policy issues she’s facing. “But it’s also about holding data center companies, developers and operators accountable.”
The regulations show a shift in Spanberger’s stance toward the industry. She has long resisted calls to cut the state’s generous tax breaks for data centers, despite growing public opposition. Spanberger has warned that having fewer data centers would hurt local governments’ ability to provide services and might leave the state open to lawsuits from companies that were depending on them.
Virginia has more data centers than any other state, with more constantly on the drawing boards from the D.C. suburbs to the rural southwest. The issue has heated up nationally and scrambled ideological lines as grassroots groups fight back against the large, noisy, resource-intensive development projects.
Spanberger signed an executive order designed to begin outlining rules around data center development. It would immediately prohibit state officials from signing secrecy agreements with data center developers, create a “tool kit” for localities to use in negotiations, speed up the creation of noise regulations and push operators to invest in local energy projects to offset price hikes in the state power grid.
She also pledged to seek further restrictions through legislation in the General Assembly session that begins in January.
While Spanberger touted the package as “the most comprehensive and aggressive” package of data center policies in the country, it does not go as far as the one-year freeze signed earlier this year by New York Gov. Kathy Hochul (D). Fifteen other states have considered legislation halting data centers, according to the National Conference of State Legislatures.
However, Spanberger’s package of study groups, rules changes and proposed legislation is an unusually thorough attempt at beginning to address the complicated topic, said Scott Babwah Brennen, director of the Center on Technology Policy at New York University.
“I’m not sure I can think of another executive order I’ve seen that is as comprehensive as this,” Brennan said. “I like a lot of what it’s gesturing at … but we won’t really know until we see some of the rules put in place.”
Many of the proposals will take time to fully implement. Spanberger promised to prevent scenarios where data centers are planned in secret and then sprung on communities when it’s too late to mount opposition, but the part of her executive order prohibiting nondisclosure agreements only applies to state officials.
Preventing such secrecy among local economic development officials would require an act of the General Assembly, which Spanberger said she would pursue next year.
Her new package of requirements would apply only to future developments and would have no impact on those already receiving tax breaks. Spanberger said it will take further study to decide how to handle existing data centers.
“The Governor is finally feeling the heat but still ignoring the fire,” powerful state Sen. L. Louise Lucas (D-Portsmouth) said in a written statement, criticizing the failure to address some $2 billion in data center tax breaks. Lucas nearly blocked passage of the state budget earlier this year over that issue, but relented when Spanberger and other Democratic leaders offered to offset industry tax breaks with a tax on excessive electricity use.
Concern has been heightened by the rapid development of artificial intelligence, which is driving the need for more data centers and raising alarms over the potential for AI to displace jobs and threaten security.
Spanberger also nodded to those fears, announcing the creation of an AI task force to recommend legislation for lawmakers to consider next year. “We simply aren’t sure if the federal government is going to act on this — though it is my hope that they move forward with new guardrails as soon as possible,” Spanberger said.
President Donald Trump earlier this week stood up for both AI and data centers, posting on social media that fears about them are “a HOAX” and decrying efforts to limit them as “a SICK conspiracy.”
U.S. House Minority Leader Hakeem Jeffries (D-New York) has said the threat of rampant AI development is real and warned that “we need to act now.”
Asked by reporters why she hadn’t done more to limit both AI and data centers, Spanberger said she is trying to make it easier for communities to handle situations as they arise. “It’s vital that the state actually provide a framework for them to make those thoughtful, good decisions,” she said.
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