Maryland Governor Wes Moore has issued an executive order requiring data centers with capacities of 25 megawatts or more to undergo rigorous state reviews. This new framework targets the industry's heavy reliance on water and electricity, mirroring a broader trend of state-level pushback against rapid computing expansion.
The 25-megawatt threshold for Maryland's new state reviews
Under the executive order signed by Governor Wes Moore, any data center project seeking state action that meets or exceeds a 25-megawatt capacity must now undergo a standardized review. According to the report,this process evaluates the facility's impact on the electric grid, local water supplies, the surrounding community, and the broader state economy. To ensure transparency, Maryland will launch a public dashboard updated monthly to disclose developer identities, expected electricity and water usage, and the state's final determination on the project .
The review process is managed by a state task force featuring representatives from the Maryland Energy Administration and the departments of commerce, labor, environment, natural resources, agriculture, and planning. Projects will be categorized as Aligned, Conditionally Aligned, or Not Aligned. Furthermore, Governor Wes Moore is seeking to have the General Assembly repeal a data-center sales and use tax exemption that has been in place since 2020 , signaling a shift away from aggressive financial incentives.
How 474 gigawatts of requests triggered Texas's permit freeze
While Maryland is implementing a review framework, Texas has aodpted a more restrictive stance. Governor Greg Abbott recently ordered the Texas Commission on Environmental Quality (TCEQ) to halt permits for data centers until comprehensive audits of water and power demands are completed. As reported, this move follows an August directive requiring the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) to audit facilities seeking grid connections.
The scale of the demand in Texas is staggering. In August,ERCOT tracked more than 474 gigawatts of requests to connect to the grid—a figure more than five times the state's record peak electricity demand. Governor Greg Abbott's office noted that roughly 90 percent of these new power requests were associated with data centers. Consequently,the Texas Water Development Board has been directed to strictly enforce water-use reporting to ensure that industrial computing does not deplete water needed by local residents.
The AI-driven shift from competition to regulation
The actions in Maryland and Texas reflect a pivotal change in how U.S. states view the data center industry. For years, state governments competed aggressively to attract these facilities, viewing them as anchors for high-tech economic growth.. However, the explosion of generative artificial intelligence has fundamentally altered the resource requirements of these sites, turning them from modest assets into massive drains on public utilities.
This tension puts policymakers in a difficult position : they must balance the desire for AI leadership and investment with the physical limits of their infrastructure.. The divergence in strategy—Maryland's conditional review versus Texas's permit pause—illustrates the two primary paths states are taking to mitigate the environmental and social costs of the AI boom.
Who will define the 'five principles' for Maryland developers?
Despite the new framework, several critical details remain unclear. While the executive order mentions that projects will be evaluated against "five principles," the source does not specify what those principles are or how they are weighted. It remains to be seen whether economic benefits, such as job creation, will outweigh environmental concerns regarding water consumption in the task force's final determinations.
Additionally, it is unclear how the "Conditionally Aligned" status will function in practice. The report does not specify what conditions the state might impose on a developer to move a project from a conditional to a fully aligned status, leaving a significant gap in the predictability of the new regulatory environment for developers in Maryland.
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