Pennsylvania House approves data center regulation bill

The Pennsylvania State House on Tuesday voted to approve House Bill 1834, a measure designed to regulate AI data centers across the Commonwealth. The bill passed 104-95 and will now be sent to the state Senate for further consideration. Authored by State Rep. Robert Matzie (D-Beaver), the legislation grants enforcement powers to the Pennsylvania Public Utility Commission to establish a new regulatory framework. The bill mandates that data centers progressively increase their use of clean, in-state energy, starting at 10% in 2027 and reaching up to 32% by 2035. Matzie stated that the legislation aims to alleviate potential strain on the state’s electric grid and protect consumers from escalating costs, specifically preventing large-scale facility expenses from being passed on to residential customers and small businesses. Additionally, it requires data centers to contribute to energy affordability initiatives like the Low-Income Home Energy Assistance Program (LIHEAP), depending on their power consumption. This legislative effort responds to calls from Governor Josh Shapiro for enhanced consumer protections amidst various data center proposals statewide, including projects in Lancaster County and Middlesex Township in Cumberland County. However, Republicans, led by State Rep. Martin Causer (R-McKean), expressed concerns that the bill's provisions could deter investment, potentially causing data center developers to choose other states. Causer criticized the renewable energy mandate, citing the high cost of these energy sources and the requirement for businesses to accept intermittent power, arguing that such mandates could squander economic opportunities for Pennsylvania. He advocated for lawmakers to collaborate with developers to strengthen the grid rather than imposing restrictive regulations. Matzie countered that the bill presents a crucial opportunity to implement essential safeguards before the data center industry undergoes further expansion in Pennsylvania, ensuring both consumer protection and energy affordability for residents.