Shapiro Tightens Data Center Rules on Power Costs, Permits
Governor Josh Shapiro has imposed new statewide rules for Pennsylvania data centers via executive order, requiring developers to cover infrastructure costs and meet environmental and community standards. These regulations aim to manage the industry's rapid growth without burdening state residents with increased energy costs or infrastructure demands. The order also includes new permitting processes, reporting requirements, and ties tax incentives to compliance.
Governor Josh Shapiro of Pennsylvania issued Executive Order 2026-05, immediately imposing new permitting, energy-cost, and local-approval requirements on data centers across the state. This executive action mandates that data center developers bear the full costs of associated infrastructure and adhere to strict environmental and community standards, including water conservation, local hiring, and community-benefit agreements, rather than shifting these expenses to residents and businesses.
The order directs the Pennsylvania Department of Environmental Protection (DEP) to integrate these Responsible Infrastructure Development (GRID) requirements into its review process. Developers must enter legally enforceable agreements or face a more restrictive permit review. It also removes data center projects from the state's Permit Fast Track Program, prohibits non-disclosure agreements, and requires the Department of Community and Economic Development (DCED) to issue guidance on zoning and community benefits.
Further, the Department of Revenue will revise guidelines for the state's Computer Data Center Equipment Exemption Program, making tax incentives conditional on GRID compliance. Shapiro's Special Counsel for Energy Affordability and the Pennsylvania Public Utility Commission (PUC) will also develop policies to prevent data center growth from increasing electricity costs or undermining grid reliability for other customers, including protocols for data centers to lose service before other customers during grid stress. This executive action comes amidst a legislative dispute over data center regulation in Harrisburg, with the Shapiro administration seeking comprehensive legislation while House Democrats support the executive order, blaming Senate Republicans for legislative delays.