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The governors of the states issued separate but similar frameworks for data centers that seek to prevent cost-shifting to other ratepayers, protect the environment and foster transparency with the public, including an outright ban on non-disclosure agreements.

Both executive orders foresee that existing state agencies will enforce the frameworks, but coordination with the PJM Interconnection and Federal Energy Regulation Commission (FERC) is needed.

Speculative proposals, undisclosed end users and duplicative interconnection requests have left Maryland communities exposed, Governor Wes Moore (D) said on September 23, so most counties have adopted temporary moratoria on data centers.

Maryland is getting more proposals for near around-the-clock power and water supply, Moore said, and the experience in PJM has shown that without safeguards, costs may be shifted and host communities may bear negative externalities.

A task force of top state cabinet officers and a chair to be appointed by Moore will have the discretion to determine if a data center proposal hews to a “coordinated review pathway.”

The task force is supposed to issue illustrative guidance for energy plans of data center developers which allow for alternatives.

Developer proposals will be evaluated on many other metrics, such as:

• Payment of the full cost of infrastructure supporting a data center and acceptance of a requirement to avoid stranded costs upon exit from the market.
• A commitment to curtailment or flexible-load participation during emergency and pre-emergency conditions.
• Whether the stated load is supported by evidence that the project is not speculative.
• Whether the developer has disclosed any duplicate or parallel interconnection or siting requests for the same project elsewhere.

The framework also looks for economic benefits for Marylanders and examines how and when the developer engaged with the local governments and the public.

Developers also have to disclose their identity, parent company, controlling entities, and anchor tenant and projected energy demand and water use.

The task force shall complete a preliminary baseline assessment within 60 days of receiving a proposal. A project would be project “aligned” if it achieves each principle or “conditionally aligned” where it will achieve each principle upon fulfillment of specified commitments.

The task force shall give weight to a host jurisdiction’s land use decisions and comments. A project that has been denied a required local approval shall not receive a determination of “aligned” or “conditionally aligned” while that denial stands.

Not aligned projects may seek reconsideration.

State agencies shall consider a project’s framework determination in exercising discretion for engagement.

Aligned and conditionally aligned projects get a coordinated review pathway, while not aligned projects do not.

The status of applications will be posted on a public task force dashboard.

The executive order also said that the director of the Maryland Energy Administration shall provide for curtailment of data center load before other customers during emergency conditions and prevent the data center from being classified as a critical load. This is unusual outside of central grid operator rules.

The framework said the load might be non-curtailable if its demand is covered by new capacity that qualifies under applicable rules of the Maryland Public Service Commission, PJM and FERC.

Virginia Wants to Limit Gas Generation

Virginia Governor Abigail Spanberger (D) said on September 18 that the “immense scale and rapid pace” of data center development has challenged existing regulations which “lack the precision” to hold developers accountable.

Virginia is known for “data center alley” in the northern section of the state, where scores of the facilities are housed in the suburbs around Washington, D.C., almost all with tax abatements.

The state’s economic development partnership will no longer provide discretionary assistance for any new data center project with an anticipated peak electrical demand of 25 MW or greater, the executive order said.

Some of the existing and planned data centers in the two states consume less than 25 MW.

Spanberger’s executive order calls for transparency for the public, adherence to air and water quality standards and land conservation and noise control by data center developers.

Data centers must pay their fair share of the generation, transmission, distribution and other public investments, and advance clean energy and grid reliability.

The state’s chief energy officer, a position that was created in March, is to build a model that includes a standardized scoring system to evaluate data center projects.

Scoring will be based on, but not limited to, a project’s impact on energy use and infrastructure, the environment, workforce development, investments in clean energy and resilience, sourcing of local sustainable construction materials and community benefits.

The document says the chief energy officer will work with the State Corporation Commission and utilities to establish procedures for the emergency curtailment of data centers that have not obtained capacity through PJM.

The state Department of Environmental Quality shall review the impact of diesel and other backup-generation operations associated with data centers.

A separate framework document released by Spanberger on same day was broader than the executive order and is likely to form legislative priorities for 2027.

That document calls for eliminating by-right approval and requiring local approval of any data center using more than 25 MW.

By-right approval is the automatic granting of a permit when a project meets all laws and codes.

Virginia also wants to require data centers to prevent sudden changes in their electricity demand from destabilizing the grid. Large load loss from data centers in 2024 in PJM was  noted in a report by the North American Electric Reliability Corporation.

Another framework initiative would limit the amount of electricity that data centers can generate from on-site natural gas or behind-the-meter gas generation.

This could lengthen the time needed for data centers to be built and favor sales by incumbent utilities in the state like Dominion, Appalachian Power and Old Dominion Electric Cooperative.

Spanberger also wants to prioritize grid access for clean energy, reduce backup generator emissions, limit on-site natural gas generation and reform utility charges that discourage investment in clean energy.

State, Federal Officials Follow Shifts in Opinion

Politicians nationwide have turned their ear to constituent concerns over data centers before next month’s elections.

Moore is running for reelection and Spanberger often supports the policy goals of the Democratic party.

Data center provisions were slipped into an infrastructure permitting reform bill that U.S. senators agreed upon last week but has yet to be introduced.

The Bipartisan American Affordability and Jobs Act of 2026 stipulates that large-load projects like data centers must pay for the specific infrastructure costs they trigger.

Developers must cover the costs of building high-voltage transmission lines, local distribution upgrades and incremental generation to serve data centers. Expenses to serve these loads cannot be shifted into a utility rate base and passed on to other consumers.

The Senate blocked consideration of similar proposals in the Ratepayer Protection Act on September 30. That bill fell three votes short of the 60 needed to overcome a filibuster.

U.S. Senator Chris Van Hollen (D-Maryland) said that the consumer protection language of the ratepayer bill was weaker than in the permitting bill.