News

Maryland joins the crowd

Across the United States, states and local governments are reassessing how to manage the rapid expansion of large-scale data centers. Growing demand driven by cloud computing, artificial intelligence, and hyperscale digital infrastructure has been met by public opposition focused on concerns about electricity consumption, water use, transmission upgrades, environmental impacts, and the allocation of utility costs. 

In response, policymakers increasingly have pursued more restrictions and controls on data center development.  Pennsylvania Governor Josh Shapiro issued an order in mid-August. Virginia Governor Abigail Spanberger followed suit in mid-September and Governor Moore has now joined the queue at the end of September.

Like many of the other states, the Maryland approach is not to ban data centers but, instead, to adopt mechanisms to ensure that data center developers pay the full costs attributable to their facilities, provide measurable economic benefits to host communities, invest in new energy resources, and engage transparently with affected residents.

The new state provisions are layered on top of the stronger local land-use controls and community benefit agreements imposed by local governments. To date, thirteen of the 24 Maryland local jurisdictions have adopted moratoriums and one (Harford County) has banned data centers. Those jurisdictions account for about 75% of the state’s population.

In parallel, the Maryland General Assembly commissioned a Data Center Impact Analysis Report to help inform future state policy. The report (now overdue) is intended to set additional rules for data center development. Over the last two years, Maryland has also enacted legislation aimed at protecting electric customers from bearing costs associated with large new loads, including the Next Generation Energy Act of 2025 and the Utility RELIEF Act of 2026. 

Executive Summary

Governor Moore's Executive Order establishes a “Maryland Data Center Framework” organized around five core principles:

1. Protect Maryland ratepayers and electric grid reliability.
2. Ensure meaningful economic benefits for Maryland residents.
3. Preserve community involvement and local government authority.
4. Protect water resources, air quality, land use, and climate goals.
5. Promote transparency and developer accountability. 

The Framework will be implemented under the oversight of a Maryland Data Center Accountability Task Force, The Task Force is composed of the leadership from the Maryland Energy Administration, Department of Commerce, Department of Labor, Department of the Environment, Department of Natural Resources, Department of Planning, Department of Agriculture, and other agencies as designated.

As part of that implementation, the Task Force will conduct reviews of qualifying projects and issue one of three determinations:

• Aligned: The project satisfies all Framework principles.
• Conditionally Aligned: The project satisfies the principles subject to specified commitments.
• Not Aligned: The project fails to meet one or more principles or does not provide necessary information.

Projects that obtain an "Aligned" or "Conditionally Aligned" determination may participate in a new Coordinated Review Pathway intended to improve coordination among state agencies and provide greater permitting predictability. Projects deemed "Not Aligned" will not receive facilitation, advocacy, expedited review, or discretionary incentives. 

The Order specifically states that a project which is “not aligned” can still receive permits through the ordinary process. However, given the current political climate, most such projects are likely to face insurmountable objections. For example, all state reviews of non-aligned or non-performing projects are forbidden until all local requirements are fulfilled. Discretionary state incentives such as grants, loans and financing are conditioned on obtaining an aligned or conditionally aligned status.

The implementation of the Framework and the progress of data center development will be tracked on a Maryland Data Center Dashboard. For each project, the Dashboard will include:

• Project location.
• Developer and parent company.
• Peak electric demand.
• Water use information.
• Status of permits and state interactions.
• Framework determinations.
• Statements of commitments.
• Annual performance reports.
• Community benefit agreements where published. 

Together, the Framework, Task Force, Review and Dashboard are likely to slow but not stop data center development in the State. In theory, the new Coordinated Review Pathway could accelerate some projects. However, actions at the local government level may create considerably more resistance to projects. For example, a project cannot receive the “Aligned” or “Conditionally Aligned” designation if a local government has “denied a required local approval.”

The Maryland Data Center Framework Principles

1. Ratepayer and Grid Protection

The Order states that Maryland residents should not bear increased electricity costs or reliability risks resulting from data center growth.
The Task Force will evaluate whether:

• Developers provide energy plans capable of meeting incremental power needs without shifting costs to other customers.
• Developers pay the full costs of required infrastructure.
• Developers provide protections against stranded costs if projects are downsized or abandoned.
• Data centers participate in load curtailment during grid emergencies.
• Developers accurately disclose project load requirements and avoid speculative interconnection requests. 

2. Economic Benefit for Marylanders

Projects will be evaluated based on their contribution to Maryland's economy, including:

• Construction and permanent jobs.
• Family-sustaining wages and benefits.
• Use of local hiring and apprenticeship programs.
• Workforce development investments.
• Research partnerships and support for Maryland universities and businesses.
• Net fiscal benefits to the State and host jurisdictions. 

3. Community Voice

The Order emphasizes that host communities should play a decisive role in project development.
Developers are expected to:

• Engage local governments and residents at an early stage.
• Provide clear project information.
• Maintain ongoing communication.
• Negotiate community benefits agreements where appropriate.
• Demonstrate consistency with comprehensive local plans and zoning requirements.

4. Environmental Protection

Projects will be assessed based on:

• Water availability and conservation measures.
• Air quality impacts from backup generators.
• Effects on the Chesapeake Bay watershed.
• Protection of overburdened communities.
• Greenhouse gas emissions.
• Decommissioning plans and e-waste management.
• Preservation of agricultural land and prime soils where feasible.

5. Transparency and Accountability

Developers must provide public disclosure regarding:

• Ownership and controlling entities.
• Major tenants, where known.
• Energy demand and water use.
• Project commitments and milestones.
• Annual performance reporting.

The Order places significant emphasis on public transparency and expressly forbids non-disclosure agreements with state agencies.

Additional Policy Directives

The Executive Order also:

• Prohibits state agencies from entering new non-disclosure agreements with data center developers regarding proposed projects.
• Directs Maryland agencies to advocate at PJM, FERC, and the Public Service Commission for stronger cost-allocation protections and large-load oversight.
• Creates a Large-Load Interconnection Working Group.
• Requires annual reporting by operating data centers.
• Directs the State to develop guidance documents for developers and local governments.
• Requires annual reports to the Governor on data center impacts and implementation of the framework. 
• During his press conference announcing the Executive Order, Governor Moore also called upon the General Assembly to repeal the property tax credits enacted by the Assembly in 2020.

Summary

Data center developers in Maryland should reassess their plans to assure, where possible, that the five key principles are met. This will require a different approach than that pursued by many earlier projects. Early community and organized labor outreach will be critical. Transparency will need to replace non-disclosure agreements. Participation in the Pathway and obtaining “Aligned” status will, in practice, become a necessity. In the author’s opinion, developers will need to document significant benefits accruing to local communities beyond the obvious property tax revenues. Without local consent to the development, a path to success in Maryland is unlikely.