Shapiro pitches requirements for data center developers

Pennsylvania Governor Josh Shapiro has elaborated on his "Governor’s Responsible Infrastructure Development (GRID) Standards," a plan designed to regulate data center growth by linking state tax benefits to specific development requirements. The proposal, initially hinted at during his February budget address, seeks to address growing concerns among Pennsylvanians regarding energy affordability, environmental pollution, noise, and overall quality of life impacts from data centers. Shapiro emphasized the state's need to be selective about projects and ensure they create genuine opportunities for communities.

The GRID Standards would mandate developers seeking state tax benefits, such as sales tax exemptions on computer equipment, to apply for certification. This process involves outlining how they would meet criteria related to energy affordability, transparency, community engagement, workforce development, economic development, and environmental protection. Certified projects would also qualify for the PA Permit Fast Track Program. Key requirements include provisions for building or buying new power capacity, installing rooftop solar panels on facilities over 100,000 square feet, and increasing clean energy usage over time, ramping up to 32% by 2035. Developers would also need to commit to $250 million in new investment, create at least 200 construction jobs and 50 permanent jobs, and work with local governments on community benefits agreements, including noise, traffic, and air quality studies.

While some environmental groups, like Conservation Voters of Pennsylvania and Clean Power PA, have praised the standards for promoting accountability and clean energy, others, such as Food and Water Watch Pennsylvania, criticize the plan as voluntary and insufficient to prevent "ill-conceived projects." The Data Center Coalition, an industry group including Amazon, Google, and Microsoft, expressed concern that the framework could complicate development within the commonwealth, arguing that data centers are being unfairly singled out compared to other major energy users. Simultaneously, two Republican state lawmakers, Sen. Jarrett Coleman (R-Lehigh) and Rep. Jamie Walsh (R-Luzerne), are introducing bills to repeal the sales tax break for data centers and empower municipalities to impose 18-month moratoriums on new data center applications, allowing time to update local zoning ordinances.