What Shapiro’s new data center order does — and doesn’t — force developers to do
Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05, establishing new Responsible Infrastructure Development (GRID) Requirements for data center proposals. The order mandates local approval and adherence to environmental standards as preconditions for state permits and sales tax exemptions. This aims to empower local communities and curb speculative data center developments across the state.
Pennsylvania Governor Josh Shapiro recently signed Executive Order 2026-05, implementing stricter environmental and transparency standards for new data center developments statewide. The order, which is not a moratorium but a new regulatory framework, directs Commonwealth agencies like the Department of Environmental Protection (DEP) to only evaluate permit applications if developers commit to the Governor's Responsible Infrastructure Development (GRID) Requirements and have secured all local approvals.
The executive order establishes two tracks for data centers with a peak demand exceeding 25 MW. An easier track is available to developers who sign a “consent order and agreement” incorporating GRID standards and provide documentation of local approvals, allowing them to receive state permits on a rolling basis. Developers opting out of this agreement will face a more difficult process, requiring all permitting and authorization applications to be submitted concurrently before any single permit is issued. The administration believes this will disincentivize speculative proposals that alarm communities without concrete plans.
Furthermore, the order unilaterally makes compliance with GRID requirements a condition for receiving Pennsylvania's sales tax exemption for data centers, a change Governor Shapiro previously sought through legislation. The Department of Revenue is instructed to update its program guidelines accordingly. While existing permits and tax exemptions are not revoked, any ongoing projects requiring new permits must comply with GRID standards. The order also bars state agencies from entering new non-disclosure agreements with data center developers.
Additional directives include the administration advocating for the Public Utility Commission (PUC) to revise protocols for data center power curtailment during emergencies and to prevent utility costs from being passed to consumers. The DEP is also tasked with recommending new regulations to mitigate environmental impacts, such as emissions from diesel backup generators. Governor Shapiro asserted his authority to issue the order, which includes a severability clause in case parts are legally challenged.