Gov. Josh Shapiro restricts data center development in Pennsylvania
Pennsylvania Governor Josh Shapiro signed an executive order significantly restricting data center development by requiring local approval for state permits and mandating projects cover their own energy costs. This policy shift, which departs from his previous pro-development stance, is expected to halt many new projects and may lead to legal challenges from the data center industry.
Pennsylvania Governor Josh Shapiro has signed a significant executive order that imposes new regulations on data center development across the state. The order mandates local approval for projects to receive state permits and removes all current and future data center developments from a previous fast-track permitting program established by Shapiro. This marks a notable change from Governor Shapiro's earlier position, as he had previously championed data center growth, including securing a $20 billion commitment from Amazon for two data centers in Bucks and Luzerne Counties.
Facing a dramatic shift in public opinion, Governor Shapiro stated he had "no other choice" but to take executive action to protect communities from "predatory developers." While the order stops short of ending sales tax exemptions, it introduces new guardrails such as requiring community benefits agreements, prohibiting state agencies from signing non-disclosure agreements related to data center projects, and mandating that projects bring their own energy and cover all associated energy usage costs.
The Data Center Coalition, representing companies like Amazon and Microsoft, criticized the order, stating that established plans should not be changed "midstream." The Shapiro administration anticipates potential legal challenges from the data center industry or property developers, with the Governor's office noting only six data center projects are currently under construction and ten have received at least one state-level permit approval among over 100 speculative projects statewide.