On September 18, 2026, Virginia Governor Abigail Spanberger issued Executive Order 22: Establishing New Nation-Leading Standards and Initiatives to Implement the Virginia Data Center Accountability Framework and Responding to Unprecedented Risk from Artificial Intelligence (the “Order”).
The Order directs implementation of the Virginia Data Center Accountability Framework (the “Framework”), a set of standards intended to protect ratepayers and natural resources. The Order also creates a rapid-response Artificial Intelligence Task Force to respond to risks the Administration attributes to advances in AI.
The Framework sets out five foundational pillars that data center developers and operators must address to do business in the Commonwealth: engaging transparently with communities; protecting the environment; improving affordability for Virginians; advancing clean energy and grid reliability; and workforce benefits.
The Order, which rescinds previous orders issued by the Youngkin Administration while retaining some of their features until further notice, directs a range of executive branch agencies, led by the Office of the Chief Energy Officer, to implement the Framework. The following are among the key requirements for compliance with the Framework:
- Community engagement: Within 120 days, the Office of the Chief Energy Officer must publish a Data Center Planning and Community Engagement Toolkit for local governments, covering model information requests and disclosure templates, guidance for evaluating project impacts, model community-benefit agreements, and siting and mitigation best practices;
- Nondisclosure agreement ban: Executive branch agencies are prohibited from entering into or enforcing nondisclosure agreements that would prevent public disclosure of material information about proposed data center developments, subject to limited exceptions such as national security;
- VA-LEAD designation: The Office of the Chief Energy Officer must develop a Virginia Local Energy and Accountable Data Centers (“VA-LEAD”) tiered scoring system, modeled on frameworks like LEED and Energy Star, evaluating energy and infrastructure impacts, water and land use, noise, workforce development, clean-energy investment, sustainable sourcing, and community benefits, with proposed criteria due to the Governor’s office by the end of 2027;
- Exclusion from state incentive programs: Effective immediately, the Virginia Economic Development Partnership may not provide assistance through the Virginia Business Ready Sites Program or other discretionary site-readiness or expedited-review programs for new data center projects with anticipated peak electrical demand of 25 MW or greater;
- Noise and water regulation: The Department of Environmental Quality must expedite data center noise regulations and rules establishing “cooling water scarcity areas,” within the designated Eastern Virginia Groundwater Management Area, and must report accelerated rulemaking timelines to the Governor within 180 days;
- Backup-generation review: The Department of Environmental Quality, with the Department of Health and Virginia Energy, must conduct a cumulative-impact review of diesel and other backup generators associated with data centers and report findings and permitting recommendations within 180 days;
- Siting diversification: Virginia Energy must identify opportunities for regionally diversified, lower-impact data center development, including brownfield redevelopment and edge/distributed facilities, and report recommendations to the Governor within 240 days;
- Cost allocation and affordability: The Office of the Chief Energy Officer must engage with utilities, the State Corporation Commission, and PJM to shield residential ratepayers from data center-driven infrastructure costs, including allocating PJM Reliability Backstop Procurement costs to the large loads causing them, and pursue programs directing data center investment toward community energy affordability;
- Grid reliability and curtailment: The Office of the Chief Energy Officer must work with the State Corporation Commission and utilities on emergency curtailment procedures for data centers under PJM’s Interim Resource Adequacy Service program once approved by FERC, and Virginia Energy must evaluate operational best practices such as ride-through and voltage protections; and
- Workforce and procurement: The Secretary of Labor and Virginia Works must develop best practices and reporting criteria for quality jobs, local workforce opportunities, and project-level workforce data, while the Department of Forestry develops local and sustainable procurement standards, all to be incorporated into the Toolkit and VA-LEAD program.
The Order also uniquely addresses the “risks posed by AI” through the creation of a rapid-response AI Task Force, co-led by the Chief Transformation Officer, Counsel to the Governor, and Secretary of Administration, and supported by a newly created AI Policy Planning Unit. The Task Force is directed to pursue executive and legislative action on AI-driven workforce displacement and data privacy risks, evaluate existing Virginia enforcement and regulatory options, and assess AI-related cybersecurity risks to state systems and critical infrastructure. It also has a mandate to coordinate with other states and with federal and international leaders, and engage directly with frontier AI developers on risk mitigation and “people-first” design. The Task Force will report to the Governor on an ongoing basis and coordinate with several cabinet secretaries, the General Assembly, and Virginia’s congressional delegation.
Virginia’s approach follows a broader wave of state-level activity, as states such as Massachusetts (via executive order) and California (via legislation) have recently moved to fill gaps in the absence of federal action. The Order is notable both for the breadth of agency directives tied to firm deadlines paired with a dedicated AI risk task force in a single executive order.
Sheppard will continue to monitor developments in the data center and AI regulatory space.