Virginia Gov. Abigail Spanberger signed an executive order on Friday implementing a “data center accountability framework” after urging by conservation groups that have been fighting for greater oversight of data centers in the state.
The executive order would ban the use of non-disclosure agreements that have made it harder for the public to follow proposed data center development. The order would also expedite development of data center noise regulations and direct a review of diesel and other backup generators used to power data centers.
Much of the plan requires approval by the Virginia General Assembly, which won’t convene again until January. But Spanberger told reporters at a news conference Friday that “the state has to show leadership”
“We are in a place where day by day community members are demanding action,” said Spanberger, who was joined by representatives from conservation groups. “As localities continue to have the option of choosing to reject or accept applications for data centers to come into their communities, it’s vital that the state actually provide a framework for them to be able to make those thoughtful decisions.”
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Data centers have been in Virginia for decades. Loudoun, Prince William and Fairfax counties — a region now known as “Data Center Alley” — are home to more than 300 data centers. Virginia is one of several states that offers a sales and use tax exemption for data center equipment, including servers, mainframes, cabling, HVAC systems and water storage tanks.
But this spring, souring public sentiment spurred some legislators to try to take away the tax exemption, which saved Virginia data centers $1.9 billion last year. While they ultimately weren’t successful in repealing the exemption, Spanberger signed into law a first-of-its-kind tax on data center energy consumption.
There’s also been change at the local level.
On Tuesday, the Board of Supervisors in Loudoun County, which has the highest concentration of data centers in the world, voted to advance a resolution pausing new data center development for 12 months.
And in early July, Blackstone’s QTS abandoned plans to build a massive data center campus on the edge of Manassas National Battlefield Park, a historic Civil War battle site. Bloomberg first reported the developer had walked away from the project, which had been ensnared in a yearslong legal battle.
Data center developers and operators, as well as the labor unions that see the projects as incredible opportunities for their members, have been doing damage control amid the backlash.
Virginia Connects, the state arm of the Data Center Coalition, a data center industry group, spent hundreds of thousands of dollars on ads this spring trying to turn around public perception, to no avail.
Nicole Riley, director of Virginia government affairs at the Data Center Coalition, said the organization and its members “share Gov. Spanberger’s goals of ensuring that Virginia can compete for the significant economic opportunities presented by responsible data center development while protecting the interests of residents, communities, and ratepayers across the Commonwealth.”
“However, significant and abrupt policy changes without meaningful stakeholder engagement could prove unworkable and jeopardize the real tangible benefits this industry can create,” Riley added in a statement.
The response from environmental watchdogs in Virginia was largely positive.
Connor Kish, director of the Sierra Club’s Virginia chapter, told reporters that creating a framework is “critical” for addressing backlash from communities that have expressed frustration with noise pollution and environmental impacts, data centers’ impact on electricity prices and a lack of transparency into new data center development.
“The world’s largest corporations are capable of doing better, and today marks a shift towards that accountability,” Kish said.
The framework is “a meaningful step forward,” said Brennan Gilmore, executive director at Clean Virginia, a nonprofit that supported Spanberger’s election but has been critical of her data center policy.
“The real test will come in the months ahead as the Governor works with the legislature to flesh out details on who pays, who bears risk, and what conditions must be met for continued data center development,” Gilmore said in a statement.
This article has been updated with additional comments.
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