Pennsylvania Gov. Shapiro signs order to limit new data centers

Pennsylvania Governor Josh Shapiro enacted an executive order on Tuesday that mandates local approval for data centers before state permits can be granted. This directive, which applies to data centers with a peak load of at least 25 megawatts, effectively pauses new developments that encounter local opposition, despite stopping short of a formal statewide moratorium. The order also includes tough new provisions such as prohibiting nondisclosure agreements, disqualifying projects from fast-track permits, and requiring data centers to bear all costs of their electricity service while being prioritized for power cuts during grid emergencies.

Governor Shapiro, who stated he would not allow Pennsylvanians to be "bullied by greedy developers," has shown an evolution from a supporter of data center development to a skeptic, driven by concerns over electricity prices and land and water usage. The Data Center Coalition, an industry trade group, acknowledged sharing the governor's goals but cautioned against changing rules midstream, emphasizing ongoing investments and economic opportunities.

The order comes as Pennsylvania is experiencing rapid data center growth, with 2.4 gigawatts of new capacity expected between March 2024 and March 2025, according to BloombergNEF. Amazon alone has pledged over $20 billion for data center hubs in the state. Environmental groups, such as Clean Power PA represented by Katie Blume, lauded Shapiro's action for holding AI data centers accountable and protecting residents from unregulated growth costs, while encouraging the use of clean energy.