Maryland Gov. Wes Moore Signs Executive Order Tightening Oversight of Large Data Centers

ANNAPOLIS, Md. - Maryland Gov. Wes Moore signed an executive order Wednesday establishing additional statewide oversight for large data center projects as concerns grow over electricity demand, water use, environmental impacts and the industry's effect on utility costs.

The order creates a standardized state review process for proposed data centers requiring at least 25 megawatts of power when those projects seek a state permit, financial incentive, letter of support or other state action.

The framework does not give the state government authority to override local governments that reject a project. Moore said final land-use decisions remain with local jurisdictions.

The order also establishes a Maryland Data Center Task Force made up of officials from seven state agencies.

Those agencies include the Maryland Energy Administration and the departments of Commerce, Labor, Environment, Natural Resources, Agriculture and Planning.

Task force will review large projects

Under the executive order, qualifying projects will be evaluated under five broad principles.

Those include protecting electricity ratepayers and the power grid, producing economic benefits for Marylanders, incorporating community input, protecting the environment and providing transparency and accountability.

After reviewing a project, the task force will issue a public determination labeling it 'Aligned,' 'Conditionally Aligned' or 'Not Aligned' with the state's framework.

The review process is triggered when a qualifying data center seeks action from the state, rather than automatically applying to every privately proposed project regardless of state involvement.

Moore said the system is intended to establish consistent expectations for developers seeking Maryland's support.

Public dashboard will track projects

The executive order also calls for a statewide public Data Center Dashboard that is expected to be updated monthly.

According to the Governor's Office, the dashboard will identify the location and legislative districts of proposed projects, the developer and parent company, disclosed anchor tenants, projected electricity demand and projected water use.

It will also show what state actions a developer has requested and the status of those requests.

The dashboard is expected to include the task force's determination, the reasoning behind that determination, commitments made by developers and annual reporting information.

The requirement adds a new layer of public disclosure to a sector that has drawn growing scrutiny from communities across Maryland.

Ratepayer protections are central to the policy

Electricity costs are a major component of the state's data center debate.

Data centers can require hundreds of megawatts of power, creating new demands on generation and transmission infrastructure.

Maryland lawmakers adopted the Utility RELIEF Act earlier this year, which includes provisions requiring large-load customers such as data centers to bear costs associated with infrastructure needed to serve their demand rather than automatically shifting those expenses to other ratepayers.

The legislation also lowered the threshold for Maryland's large-load customer rate framework to 25 megawatts under specified conditions and created additional registration and oversight requirements.

Moore has repeatedly argued that data center developers should pay for infrastructure attributable to their projects.

The new executive order adds a broader project review process covering economic, environmental and community considerations in addition to existing electricity regulations.

Water and environmental impacts will also be reviewed

The task force will examine projected water demand and environmental effects as part of its evaluation.

Large data centers can use substantial amounts of water for cooling, depending on their design, location and cooling technology.

Environmental concerns have become a major point of debate in Maryland jurisdictions considering whether and where the facilities should be built.

Several counties have adopted temporary moratoriums or other restrictions while local officials develop zoning and environmental rules for the industry.

The executive order does not replace those local rules.

Tax exemption also targeted

Alongside the executive order, Moore said he plans to ask the Maryland General Assembly during its 2027 session to repeal the state's Data Center Sales and Use Tax Exemption.

Maryland enacted the incentive in 2020 to attract data center investment by exempting qualifying equipment from sales and use taxes when companies met investment and employment requirements.

Repealing that tax benefit would require legislative action and is not accomplished by Wednesday's executive order.

The proposal is therefore separate from the new review process that took effect through executive action.

Maryland's approach to data centers has changed significantly since the tax exemption was created.

State officials initially focused heavily on attracting the industry as an economic development opportunity, while more recent policy has placed greater emphasis on electricity costs, grid capacity, local approval and environmental impacts.

Local governments retain authority

One important limitation of the executive order is that it does not create statewide approval for projects rejected by counties or municipalities.

Maryland Matters reported that Moore said the state would not override a local community that says no to a proposed development.

That leaves zoning and many land-use decisions in the hands of local governments even as the state establishes a more uniform process for projects seeking state support.

Several Maryland jurisdictions have already imposed moratoriums or restrictions while evaluating the potential effects of large-scale data center development.

The combination of local restrictions and the new state review framework means developers could face separate approval processes at both levels of government.

What happens next

The Maryland Data Center Task Force will now begin implementing the executive order, publishing review requirements and establishing the public dashboard.

Future projects requiring 25 megawatts or more and seeking state action will be evaluated under the new framework.

The administration will also have to work with lawmakers if it wants to eliminate the existing data center tax exemption during the 2027 General Assembly session.

The practical effect of the executive order will become clearer as the first major projects move through the new review process and the state begins publishing determinations, electricity demand, water use and developer commitments.