Pa. state House passes two measures on data center regulation

The Pennsylvania state House recently advanced two significant bills aimed at regulating hyperscale data center construction, marking a continued effort by Harrisburg lawmakers to address the rapid growth of the industry. The legislation comes amidst opposition from various communities and environmental groups. One of the approved bills would establish a model ordinance, offering state-drafted recommendations for municipalities to adopt regarding data center building height and size, as well as other standards for cloud-computing and artificial-intelligence campuses. The second bill mandates annual reporting of water and electricity usage, including future consumption estimates, from data centers, with a $10,000-per-day penalty for non-compliance. These reporting requirements aim to mitigate concerns over resource consumption. State Representative Kyle Mullins, a Democrat from Northeastern Pennsylvania and a sponsor of both bills, highlighted the urgent need for guidelines, describing the current data center development as a "reckless gold rush" in communities that feel overwhelmed. Mullins noted at least nine, and now ten, data center proposals in his Lackawanna County district alone. While Republican House leader Jesse Topper opposed the bills, warning that such regulations could deter investment and arguing for local control over guidelines, supporters emphasize the model ordinance is voluntary for municipalities. Representative Jamie Walsh (R-Luzerne), despite fighting local data center proposals, also opposed the zoning bill, fearing it might inadvertently accelerate construction. The Data Center Coalition, an industry advocacy group representing developers like Amazon and Google, opposes the energy and water reporting requirements, citing that other industries with significant resource consumption are not similarly singled out. Dan Diorio, Vice President of State Policy at the Coalition, argued that many data centers recycle cooling water and can provide more tax revenue than a country club while using less water. Meanwhile, environmental groups largely support the legislation. The two bills now move to the Republican-controlled state Senate's Environmental Resources and Energy committee, where their future is uncertain. Additionally, other related bills are pending, including one from Senator Camera Bartolotta (Washington County) to fast-track permitting for environmentally compliant data centers and a proposal co-sponsored by Representative Dan Deasy (Pittsburgh) to repeal a sales tax exemption for data center equipment.