Shapiro puts conditions on fast-track perks for data centers amid community backlash
Pennsylvania Governor Josh Shapiro has imposed new conditions for data centers to receive expedited permitting and tax exemptions, requiring them to pay full electricity costs, limit water use, and conduct local outreach. This decision is a response to significant community backlash and reflects a growing trend among governors nationwide to regulate the energy and water-intensive operations of data centers. The new standards in Pennsylvania are legally binding with penalties for non-compliance.
Pennsylvania Gov. Josh Shapiro announced new requirements for data centers seeking expedited permitting and tax exemptions. Under his Governor’s Responsible Infrastructure Development (GRID) standards, developers must now pay the full cost of electricity, limit water usage, and engage in local community outreach. An executive order signed this week mandates that the Department of Environmental Protection will not review permitting applications for projects that do not meet these standards until they complete the local approval process. Shapiro emphasized his legal authority to implement these legally binding consent orders with penalties for non-compliance.
This policy shift comes amidst increasing community backlash against data centers, which are perceived as energy- and water-hungry, especially with the surge in artificial intelligence. Shapiro is facing pressure from his GOP opponent, Stacy Garrity, as communities across Pennsylvania express concerns over "unacceptable" speculative data center proposals.
The trend extends beyond Pennsylvania. Texas Gov. Greg Abbott, who previously championed data centers, has now ordered regulators to address concerns about electricity bills and even hold up projects. He also plans to introduce legislation to impose new regulations and remove tax breaks. Similarly, governors in Arizona (Katie Hobbs), New York (Kathy Hochul), and Illinois (JB Pritzker) have taken steps to curb data center development, including implementing moratoriums on tax exemptions or construction.
Gubernatorial races in Ohio and Wisconsin also feature data center policies as key issues. Candidates in both states are proposing tougher standards or considering moratoriums, reflecting widespread public discontent over environmental impacts, property values, and quality of life concerns associated with the increasing scale of modern data centers.