Pa. data centers: How lawmakers are responding, from electricity and water use to tax breaks

Lawmakers in Pennsylvania are grappling with how to manage the significant increase in data center development across the state and the broader Philadelphia region. Research firm Wood Mackenzie predicts that U.S. data center electricity consumption will nearly double in the next five years, prompting state legislatures nationwide to introduce various bills addressing their impact. In Pennsylvania, legislative efforts are targeting potential hikes in household electricity bills, tracking water usage, and ensuring local economic benefits. Some lawmakers advocate for faster data center permitting, while others propose a complete pause on hyperscale data center development. Tim Profeta, executive in residence at the Nicholas Institute for Energy, Environment & Sustainability at Duke University, notes that the surge in data center demand, alongside electric vehicles and manufacturing, is contributing to the largest increase in U.S. electricity demand in decades. This presents both an opportunity to improve the grid and a risk for higher household costs and grid reliability issues. The Pennsylvania House of Representatives recently passed a bill, sponsored by Democratic Rep. Robert Matzie, that would mandate the state's Public Utility Commission to create rules forcing data centers to bear the costs of necessary grid upgrades and protect other ratepayers. The bill also requires data centers to source at least 10% of their electricity from new, clean power by 2027, or contribute to a clean energy fund, and agree to reduce power use during emergencies. This bill now moves to the Republican-controlled Senate for consideration, where discussions are reportedly progressing, with Senate Majority Leader Joe Pittman emphasizing the need to address community impacts alongside economic opportunities.