First Bill Regulating Data Centers Passes In PA House: What To Know

HARRISBURG, PA – The Pennsylvania House of Representatives has passed the state's first-ever bill aimed at regulating data centers, a legislative response to the growing impact of artificial intelligence facilities on the electrical grid and environment. The bill, which passed 104 to 95 mostly along party lines, seeks to prevent technology companies from passing the infrastructure costs associated with increased electrical usage onto taxpayers through utility rate hikes, such as a recent proposal by PECO. Key provisions of the legislation include requirements for data centers to utilize higher amounts of in-state renewable energy, like wind and solar, and to contribute to rate assistance and energy conservation programs for economically vulnerable Pennsylvanians. Elizabeth Marx, executive director of the Pennsylvania Utility Law Project, emphasized that the bill ensures data centers bear their infrastructure costs and build new clean generation, preventing families from facing additional energy burdens. Despite widespread concerns about rising energy bills, extensive water usage, and environmental consequences, Pennsylvania currently lacks statewide standards or oversight for data center construction. Governor Josh Shapiro has, conversely, proposed legislation that would remove local jurisdictions' authority in approving data center plans, centralizing project approvals under a state-run board. This has created a political divide, with some Democrats, including U.S. Senator John Fetterman, advocating for unrestricted growth, while many Republicans push back against state control and local impacts. Experts project significant strain on the power grid, with a June 2025 Carnegie Mellon University study suggesting U.S. electricity generation costs could rise by 8 percent by 2030, potentially reaching 25 percent in areas heavily impacted by data center demand. Furthermore, researchers anticipate a 30 percent increase in greenhouse gas emissions from power generation due to data centers over the next five years. The bill now awaits consideration in the state Senate, where Republicans hold a slim majority, and its path to Governor Shapiro's desk remains uncertain.