What Shapiro’s New Data Center Order Does — And Doesn’t — Force Developers To Do

Pennsylvania Governor Josh Shapiro recently signed an executive order introducing significantly stricter environmental and transparency standards for new data center developments across the state. The order establishes a two-track permitting system for data centers with peak demand over 25 MW, favoring those that adhere to Shapiro's Governor’s Responsible Infrastructure Development (GRID) standards.

Under the new system, developers who sign a “consent order and agreement” incorporating GRID standards and provide documentation of all local approvals can receive state permits on a rolling basis. Conversely, non-GRID-compliant developers face a more difficult process, requiring all permitting and authorization applications to be submitted before any single permit is issued, with any missing documentation necessitating a restart. This aims to empower local decision-making by making local zoning approvals a precondition for state permits and to deter speculative data center proposals that can cause community concern without a clear development path.

The executive order also unilaterally ties compliance with GRID requirements to eligibility for Pennsylvania's data center sales tax exemption, a change previously sought through legislation. While the order does not retroactively affect existing permits or tax exemptions, any ongoing projects needing further state permits must comply with the new GRID standards. Additionally, the administration will advocate for the Public Utility Commission to prioritize curtailing data center power during emergencies and prevent associated utility costs from being passed to consumers. The Department of Environmental Protection is also instructed to recommend new regulations to mitigate environmental impacts from data centers, such as emissions from backup generators.