New data centers in Maryland to get additional scrutiny under governor’s order

This story was originally published by Maryland Matters.

Maryland Democratic Gov. Wes Moore is commissioning a state task force to examine new data center proposals and advise local jurisdictions considering the projects.

The final decision on data center projects still rests with local governments, Moore said during a news conference Wednesday morning in Annapolis.

“Our administration will always stand with the people, and the state will not go around a local community’s ‘no,’” Moore said.

Moore said he also plans to advocate for the repeal of a state tax exemption for data centers, established in 2020, during the next legislative session, which begins in January.

Moore’s new task force, which will be staffed by seven state agencies, will evaluate proposals based on whether they align with the state’s principles, which include protecting electricity ratepayers from cost burdens, providing sufficient environmental protections and having the support of the community, among other factors.

“They need to pay their own way, or they need to go away,” Moore said.

The task force will decide whether projects are “aligned, conditionally aligned, or not aligned” with the state’s principles. It will have purview over projects that expect to consume at least 25 megawatts of electricity at their peak demand.

The governor also established a public online dashboard, which will be updated monthly and list data center proposals and certain specifications about them, including the name of their developer, expected peak energy demand and anticipated water use.

“Any company seeking the state’s help will have to make commitments that are specific, that are measurable, and importantly, that are public,” Moore said.

The task force’s determination about a data center project does not have the power to unilaterally sink it, but it could have weighty implications for a data center developer.

Moore’s executive order calls on his agencies to delay their consideration of permits for data center projects that are considered “not aligned” with the state’s principles.

“Agencies shall defer substantive review until the developer documents all required local land use approvals,” reads the executive order.

And in order for a data center developer to receive an incentive, grant, loan or financing from the state, it must be considered aligned or conditionally aligned with the state’s principles, per Moore’s order.

Projects that get a favorable decision from the task force also could get other perks, including letters of support, or advocacy from state officials before other bodies such as regional electric grid operator PJM or the Federal Energy Regulatory Commission.

Going forward, Moore also commanded his agencies not to enter into any non-disclosure agreements with data center developers, operators, or site-selection agents. The order states that any such agreements already signed will be honored, but not renewed or extended.

Moore’s executive order stops well short of a ban or pause on data centers. But Moore indicated in a recent interview with Punchbowl News, a Washington, D.C.-based political news site, that if a statewide moratorium bill landed on his desk next year, he would sign it.

During Wednesday’s news conference at the State House, Moore called moratorium decisions a “local jurisdictional issue.”

“We don’t have that authority, but what we do want to do is making sure that we are clear and transparent with our local jurisdictions about what type of elements need to be in place in order to receive state support,” Moore said.

Moore’s order attracted criticism from groups that have called for him to embrace a ban, including Andy Ellis, the Green Party candidate for governor.

“We’re demanding a ban,” Ellis said in a statement Wednesday. “A moratorium is a half-measure, but a task force is nothing. It’s lip service, it’s cowardly, and it does nothing to stop extractive corporations.”

Environmental group Food & Water Watch said in a statement it was “glad the governor is pledging to roll back the tax exemptions and wants to regulate this wild industry,” but argued that further steps are needed, including a statewide pause.

For instance, Moore should also push to repeal a bill he supported in 2024, which exempted diesel back-up generators at data centers from an approval process at the Maryland Public Service Commission, said Jorge Aguilar, southern regional director with Food & Water Watch, in a statement.

“Moore’s announcement is a step in the right direction,” Aguilar wrote. “It’s not the full leap to action Maryland needs.”

The Chesapeake Climate Action Network is also calling for a statewide pause, and for the legislature to “finish the task” with additional conditions on any future data centers.

“Given the deepening climate crisis, Gov. Moore and the General Assembly must explicitly require all new data centers run on 100% clean energy. Period. Full stop,” said Brittany Baker, the organization’s Maryland director, in a statement.

Maryland Senate Minority Leader Steve Hershey (R-Upper Shore) argued Moore’s plan contradicts his previous statements calling for Maryland to lead on technology, AI and data centers.

“You cannot recruit an industry with one hand while taxing it and taking away its incentives with the other,” Hershey said. “That kind of inconsistent economic policy makes Maryland less competitive and gives businesses another reason to invest somewhere else.”

Moore argued on Wednesday that the new state guidelines for data center projects will provide clarity for developers hoping to locate projects in Maryland.

Moore’s data center task force will be spurred to action when a data center developer makes any new request of the state, such as when a developer applies for a state permit. But the task force could also receive a referral from a state agency, a local government or the Maryland Public Service Commission, which regulates the state’s gas and electric utilities.

At that point, the task force would have 60 days to issue an initial assessment of the project and post it to the public website. The order does not contain a firm deadline for the task force to issue its final decision. Developers can ask for a reassessment within 30 days of the decision “by submitting additional information or commitments.”

Maryland Matters is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Maryland Matters maintains editorial independence. Contact Editor Steve Crane for questions: info@marylandmatters.org.