Virginia's New Data Center Rules Restrict Natural Gas While the Grid Says It Needs More Power

Virginia hosts more than a third of the world's hyperscale data centers, according to the Daily Signal. That growth is now colliding with the state's own energy rules, and nobody in Richmond seems to agree on how to fix it.

On September 18, 2026, Gov. Abigail Spanberger signed Executive Order 22, creating the Virginia Data Center Accountability Framework, according to the law firm Williams Mullen, which tracks the policy for developers. The order bans most non-disclosure agreements tied to data center projects, limits state economic-development assistance for projects requiring 25 megawatts or more, and directs state agencies to study environmental, water, and community impacts. Part of the framework would also cap how much electricity data centers can generate from on-site natural gas.

That last piece is where the criticism starts. PJM Interconnection, the grid operator serving Virginia and 12 other states, has asked federal regulators to require large-load customers like data centers to produce their own power during peak demand, according to the Daily Signal. Restricting on-site gas generation while simultaneously asking data centers to self-supply power creates a contradiction.

Republicans call the plan internally contradictory

House Minority Leader Terry Kilgore, a Republican from Gate City, told Fox News Digital that Spanberger's proposal "raises serious questions about whether it can actually work." He pointed to language in the framework that tells data centers to source their "own clean power" while limiting the natural gas generation that would let them do exactly that. "What reliable, dispatchable source of power is supposed to fill the gap? That's not a political question: it's how the grid works," Kilgore said.

Kilgore also flagged a penalty structure in the plan. Data centers that don't meet the governor's preferred clean-energy standards could face higher taxes, according to WFMD's reporting on the Fox News Digital interview.

A Democrat says it doesn't go far enough

Criticism isn't only coming from Republicans. State Sen. Louise Lucas, a fellow Democrat, said "the governor is finally feeling the heat but still ignoring the fire," according to the Daily Signal. Lucas's specific complaint: the framework does not end $2 billion in sales tax exemptions currently given to data centers.

A Spanberger spokesperson defended the plan to Fox News Digital as the "most comprehensive and wide-ranging" data center policy in the country, saying it protects both residents' utility bills and Virginia's "natural beauty." The spokesperson also said the framework has bipartisan public support and accused the Trump administration of dismissing residents' concerns about data centers' energy, water, and land use. The order does not ban on-site gas generation outright, only restricts its use. Spanberger separately signed a bill from Del. Rip Sullivan setting a target of 1,600 megawatts of energy storage capacity statewide.

The gas plants already in the pipeline

While Richmond argues over the executive order, four natural gas plant applications are working through the approval process, according to the Royal Examiner. Dominion Energy's 944-megawatt Chesterfield County plant already has approval from the State Corporation Commission, and customers are already paying for it on their bills. That approval is being challenged at the Virginia Supreme Court by the Southern Environmental Law Center and the Sierra Club, though the two groups don't agree on what they think the SCC got wrong. Neither is challenging the commission's underlying finding that Virginia faces a real reliability threat.

Separately, Dominion has proposed a roughly 3-gigawatt gas plant in Cumberland County, according to Canary Media. That proposal would test the limits of the 2020 Virginia Clean Economy Act. That law bars new fossil fuel plants and requires existing ones to close within two decades, but it includes a waiver process regulators can use when reliability is at stake. Environmental advocates argue gas isn't needed to solve the reliability problem. The SCC's own review concluded otherwise in approving the Chesterfield plant.

Nuclear isn't a fast fix either

Alternatives aren't moving quickly. The Federal Energy Regulatory Commission on September 25 rejected a complaint from Oklo, an advanced nuclear company, seeking to reinstate its 750-megawatt mixed-technology project, which combines 150 megawatts of nuclear generation with fuel cells and gas, into PJM's interconnection study cycle, according to Utility Dive. PJM dropped the project in early August after Oklo failed to resolve flaws in its application. FERC said Oklo can reapply or use PJM's expedited track, open until December 31, 2027, but the delay is already expected to run at least 18 months and raise costs, according to the company's own complaint.

None of this settles what fills the power gap in the near term. Spanberger has said she'll work with the General Assembly in its 2027 session to turn parts of the executive order into permanent law, according to Williams Mullen. The fight over gas, nuclear, and grid reliability in Virginia is only getting started.