THE COMMONWEALTH THIS WEEK

September 13-September 19, 2026 | Virginia This Week

THE BIG PICTURE

This was the week Virginia stopped asking whether the data-center economy needed guardrails and started building them — in three branches, at three levels of government, in the same seven days. Gov. Abigail Spanberger signed Executive Order 22 ending by-right approvals and banning NDAs between operators and state officials. The General Assembly moved a $205 billion budget carrying the Commonwealth's first-in-the-nation per-kWh tax on data-center electricity. The Loudoun County Board voted 7-1-1 to draft a 12-month pause on new applications in the world's largest cloud hub. And DEQ handed Microsoft a $2.5 million penalty at its Leesburg campus — the first real financial consequence for a hyperscaler operating in Virginia. Any one of those actions would define a normal week. Stacked, they mark a regime change.

The tension underneath is that Virginia is trying to keep the revenue and lose the liability at the same time — and the physics of that are unresolved. Data centers still fund more than half of Loudoun's local budget. The $0.011/kWh consumption tax starts collecting this month. The SCC has convened three in-person hearings on the $67 billion Dominion–NextEra merger, a rare procedural signal that ratepayer stakes are now viewed as public-interest stakes. Meanwhile Prince William is on deck September 22 to shrink its own overlay district, meaning both anchor counties of "Data Center Alley" will have narrowed by-right pathways within a month of each other. The diverted demand has to go somewhere, and Fauquier didn't ask for it.

The rest of the week fits the same frame: a government reasserting itself against actors that had grown accustomed to permissive rules. Attorney General Jay Jones warned DHS its noncitizen-voter hunt may have broken Virginia law, extracted a $694 million settlement from a subprime auto lender, and helped keep a federal mail-ballot rule blocked as early voting opened. Spanberger quietly withdrew a Youngkin-era transgender athletics regulation. Judge Leonie Brinkema declined to break up Google but forced open its ad auctions. The through-line isn't ideological — it's institutional. Virginia's regulators, prosecutors, and county boards spent the week saying no in ways that will define the next two years.

THIS WEEK IN VIRGINIA

Spanberger draws the line: no more by-right data centers, no more NDAs

Gov. Spanberger signed Executive Order 22 and unveiled a statewide Data Center Accountability Framework she called the "most comprehensive and aggressive" oversight regime in the country. The order eliminates by-right approvals for large projects, bans nondisclosure agreements involving state officials, tightens environmental and energy standards, and stands up a new AI Task Force — with a legislative package cued up for the 2027 General Assembly session.

The NDA ban may be the most consequential technical piece. For years, siting negotiations between hyperscalers and state agencies happened behind confidentiality walls that kept local supervisors and ratepayers in the dark on load projections and grid commitments. Ending that practice — combined with the by-right elimination — restructures the deal-making itself, not just the paperwork afterward.

For Northern Virginia the practical signal is clear: future hyperscale projects will face more public scrutiny, and local permitting battles will be more political, more technical, and slower. Watch whether the 2027 legislative package codifies the executive order into statute — an EO can be rescinded by the next governor, a statute cannot.

Loudoun pauses, Prince William shrinks, Microsoft pays

The Loudoun Board of Supervisors voted 7-1-1 on September 15 to direct staff to draft a resolution pausing new data center applications for up to 12 months, with a final vote scheduled for October 13 (some board materials point to October 20). Chair Phyllis Randall and the county attorney framed the measure carefully as a temporary "pause" — not an open-ended moratorium — to stay within Dillon Rule limits, and it applies only to new filings. Loudoun currently hosts roughly 233 data centers and the industry supplies more than half of local tax revenue.

Downstream in Prince William, supervisors are set to consider on September 22 shrinking the Data Center Opportunity Zone Overlay District and tightening by-right siting in areas that have been open for a decade. That comes after the 2,100-acre PW Digital Gateway proposal on Pageland Lane effectively died when courts voided approvals and the developer withdrew in July 2026. The Planning Commission has already voted to require any new data center to sit at least 500 feet from homes and schools — up from the previous 50-foot buffer.

Meanwhile, DEQ hit Microsoft with roughly $2.5 million in penalties at its Leesburg data center for diesel backup generators that exceeded fuel and emissions permit limits, and opened a public comment period on a proposed consent order. The action is backed by updated Virginia code on generator emissions standards. In Fairfax, protests continued against the Plaza 500 project in Bren Mar, showing the coalition against big data centers now runs across the political spectrum. The connective tissue: two anchor counties narrowing by-right pathways in the same month, a hyperscaler paying real money for compliance failures, and a governor's framework arriving on top. The diverted demand will land in Fauquier and Stafford — counties without Loudoun's zoning bench.

The $205 billion budget carries a first-of-its-kind tax

Legislators advanced a $205 billion state budget that carries a $0.011 per-kWh electricity consumption tax on data centers, effective for power used from July 1, 2026 through June 30, 2028. The first payments are due in September 2026. The tax is capped at $600 million per fiscal year with excess refunded pro rata, and functions as a two-year pilot while a Joint Subcommittee on Tax Policy studies broader options before the 2027 session.

The timing is not coincidental. As Loudoun and Prince William constrain siting, Richmond is trying to capture fiscal upside from the existing base before the buildout slows. It is a rare moment when a state levies a targeted use tax on an industry that funds a majority of two counties' operating budgets — and does so with the industry's own trade groups largely unable to stop it, because the executive branch, legislative branch, and largest host localities are all pushing in the same direction.

Watch the SCC transmission cost-allocation regime coming into force this fall: Dominion is required to file a new line-extension policy assigning direct-connect substation costs to large-load customers rather than socializing them across ratepayers. Layered onto the consumption tax, the combined effect materially changes hyperscale pro-formas in Virginia for the first time.

Jay Jones opens two fronts: DHS on elections, subprime lenders on consumers

Attorney General Jay Jones sent a formal letter to Homeland Security Secretary Markwayne Mullin warning that DHS's noncitizen-voter hunt may have violated multiple Virginia election and computer fraud statutes, citing a whistleblower report that DHS employees misrepresented themselves on the Commonwealth's voter-lookup tools. Jones demanded the practice cease and reserved additional legal action.

At the same time, early voting opened in Virginia after the Supreme Court's action left a federal court's block of a Trump-administration USPS mail-ballot rule in place, meaning the disputed federal requirements will not apply in November. A separate fight has erupted over Virginia's 45-day early-voting window — another dispute the AG's office is likely to end up litigating.

On a different track, Jones announced a $694 million settlement with subprime auto lender Credit Acceptance Corporation over allegations of predatory lending that saddled Virginia consumers with high-cost, often unaffordable car loans. The settlement is one of the largest consumer actions in Commonwealth history. Together the three moves — the DHS letter, the mail-ballot posture, the Credit Acceptance deal — establish that this AG's office intends to be a first-mover on both federalism fights and large-scale consumer enforcement, not just a defensive litigator.

Brinkema won't break up Google — but forces open the ad auctions

In United States et al. v. Google LLC, Judge Leonie M. Brinkema in the Eastern District of Virginia rejected DOJ's bid to force divestiture of Google's AdX exchange, instead imposing sweeping behavioral remedies that require Google to open its ad auctions and publisher tools to rivals on equal terms. The remedies bar Google from tying its DFP publisher server to AdX and mandate real API integrations with Prebid and competing ad servers — restructuring how online advertising works without a corporate breakup. The order was issued September 2 and unsealed for detailed analysis on September 17.

The ruling matters two ways. Substantively, it establishes a template for behavioral antitrust remedies at hyperscale — one competitors and regulators worldwide will now argue over. Institutionally, it cements EDVA's rocket docket as the preferred venue for the highest-stakes technology cases, sustaining demand for Alexandria-based antitrust, compliance, and appellate work.

Elsewhere in EDVA this week: Afghan national Mohammad Sharifullah was sentenced to 20 years for material support to ISIS-K tied to the 2021 Abbey Gate attack, and the office announced two new prosecutions in a nationwide PPP fraud takedown that reached more than 160 defendants and roughly $245 million in intended loss. Virginia's federal courthouse remains where national security, corporate power, and pandemic-era fraud all converge.

SCC schedules rare in-person hearings on the Dominion–NextEra merger

The State Corporation Commission ordered three in-person public hearings on the proposed Dominion Energy–NextEra merger, scheduling the first for November 5 at its Richmond courtroom and committing to two more locations to be announced. A virtual public witness hearing via Microsoft Teams is set for September 30. Ordering in-person hearings is a rare procedural signal — the SCC does not do it for merger paperwork it considers routine.

The hearings give local governments, industrial customers, and ordinary ratepayers a rare direct-testimony channel on how the combined utility would handle rate design, transmission planning, and capacity commitments to data centers and defense installations. Given the parallel SCC direction that large-load customers should shoulder their own direct-connect transmission costs, the merger docket is now the venue where Virginia's data-center power arithmetic gets re-decided.

Watch whether Southwest Virginia gets one of the two remaining hearing locations. If the SCC selects a site like St. Paul or Abingdon, ratepayers in coalfield communities get a first-hand say in a $67 billion deal otherwise argued in Richmond conference rooms.

Spanberger declares drought emergency, withdraws Youngkin transgender rule

Two very different executive actions defined Spanberger's non-data-center week. She declared a state of emergency for Virginia farmers facing a statewide hay shortfall of roughly 500,000 tons because of drought. Executive Order 21 authorizes over-width waivers for hay shipments and activates emergency support tools so farmers can move feed faster into winter. The drought's severity — not just its persistence — is what forced the move, and rural transport, fuel, and feed markets will feel it through Q4.

Separately, reporting surfaced that the administration quietly withdrew a proposed regulation that would have barred "biological males" from girls' athletic teams and restricted access to female-designated locker rooms and bathrooms — a rulemaking begun under former Gov. Glenn Youngkin. The withdrawal was executed July 30 without a public announcement and only drew wider attention this week. It leaves school divisions without a statewide mandate on transgender participation, pushing decisions back to local boards and VHSL policy. It is the clearest policy reversal so far between Youngkin's tenure and Spanberger's — and the fact that it went unannounced tells you as much about the politics as the substance.

WHAT TO WATCH

• Prince William Board of County Supervisors, September 22: Vote to shrink the Data Center Opportunity Zone Overlay District. If it passes alongside Loudoun's pending pause, the two anchor counties of Data Center Alley will have simultaneously narrowed by-right pathways, and the next wave of hyperscale siting pressure lands on Fauquier and Stafford — neither of which has zoning built for it.
• SCC virtual public witness hearing, September 30: First public testimony window on the Dominion–NextEra merger before the November 5 in-person hearing in Richmond. Watch how many localities file to testify — each additional locality shifts the docket from a formality toward a contested proceeding.
• Loudoun Board of Supervisors, October 13: Final vote on the 12-month data-center application pause. A separate legal opinion is due October 6 on whether the board can rescind by-right grandfathering granted in March 2025. If both actions land, roughly two dozen pipeline projects lose by-right status overnight.
• DHS response to AG Jones's demand letter: If DHS does not provide written confirmation the noncitizen-voter lookups have stopped, the fight escalates from a letter to a subpoena or lawsuit — a template other state AGs will copy going into their own midterms.
• Microsoft's response window on the DEQ consent order: If Microsoft contests the $2.5 million penalty rather than paying, the case becomes a courtroom test of how much operational latitude data centers get during grid emergencies — the precedent every operator will cite.

EARLY SIGNALS

• The SCC transmission cost-allocation order is quietly rewriting hyperscale economics. Under an SCC order issued in late July, Dominion has 90 days to file a new line-extension policy that assigns costs of direct-connect substations and high-voltage lines to the large-load customers they serve, rather than socializing those costs via Rider T-1. That filing lands inside this fall. Combined with the new $0.011/kWh consumption tax now being collected, projects modeled on socialized transmission costs need to be repriced. Expect at least one publicly announced hyperscale project to be paused or resized within 60 days.
• Loudoun is quietly asking whether it can rescind grandfathering. Board counsel is reviewing whether the county can roll back by-right entitlements granted in March 2025, with a legal opinion due October 6. The public conversation is about the 12-month pause; the more consequential question is retroactivity. If the answer is yes, dozens of option agreements and land assemblages become stranded assets.
• Federal procurement is signaling a new NOVA build-out that has nothing to do with data centers. VA posted a presolicitation for roughly 56,461 square feet of outpatient clinic space in Northern Virginia (responses due October 2), and BOP has an active solicitation for Residential Reentry Center services in the DC metro including Northern Virginia. Both are pre-lease-stage federal tenancy commitments that will drive site fights and neighborhood politics in 2027 — and neither has hit local boards' agendas yet.
• Higher-ed revenue is being reshaped by federal moves, not Richmond ones. Axios Richmond reports new visa restrictions took effect September 15 and a proposed federal rule could strip tax-exempt status from private schools providing race-targeted aid. Separately, Virginia institutions have a November 4 deadline to coordinate rather than compete for certain federal research awards. UVA and Virginia Tech's grant strategies get rewritten inside two months.

COMMONWEALTH LIFE / WORTH DOING

• Virginia Tech buys the Hotel Roanoke conference center for $14 million. The Hotel Roanoke Conference Center Commission unanimously approved the sale to a Virginia Tech Foundation subsidiary, deepening the university's physical footprint in Roanoke and the New River Valley and continuing a trend of Virginia universities expanding into quasi-commercial roles.
• Fall festival season opens across the Commonwealth. The Reston Multicultural Festival at Reston Town Center, the opening weekend of Cox Farms Fall Festival in Centreville, and the Capital One Center Celebration of the Arts in Tysons draw regional crowds. St. Benedict Oktoberfest runs in Richmond, with the Virginia Beach Neptune Festival and Farm Aid 2026 on the near horizon.
• VDOE's mid-September Education Update focused on teacher professional learning — skilled reading in content areas, health and PE office hours, Title program monitoring — with Board of Education meetings on September 23–24. A quiet governance week for K-12, with the transgender-athletics regulation withdrawal the biggest state-level change.

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