Pennsylvania Governor Enacts Executive Order Restricting Data Center Development
Pennsylvania Governor Josh Shapiro signed an executive order imposing new "strictest guardrails in the nation" for data center development, requiring consent agreements covering transparency, energy affordability, workforce development, and environmental protection. While this doesn't include a full moratorium like some other states, it introduces significant regulatory requirements for new projects. Other states like New York, Texas, and Maryland are also implementing various restrictions or moratoriums.
Pennsylvania Governor Josh Shapiro has enacted a sweeping executive order imposing new regulations on data center development, which he touts as the "strictest guardrails in the nation." The order, a significant policy shift from his previous stance of welcoming data center investments, requires developers to sign a consent agreement detailing compliance with new guidelines in areas such as transparency, energy affordability, workforce development, and environmental protection. While the administration argues these multi-pronged requirements are more effective than a full moratorium, some Republican leaders criticized the move as an election-year flip-flop, and anti-data center activists believe it does not go far enough.
The executive order mandates that data center developers seeking state-level permit approvals provide detailed plans for projected energy generation, water usage, and community benefits. Failure to adhere to these rules will result in indefinite delays for projects. Existing state-permitted projects can proceed, but future approvals will necessitate signing these agreements. This approach contrasts with other states like New York and Texas, which have implemented statewide moratoriums on new data center construction. Maryland allows local governments to enact moratoriums, with Baltimore County having already done so.
Neighboring states and others nationwide are adopting diverse strategies to manage data center impacts. New Jersey Governor Mikie Sherrill signed bills creating a new tax and rate structure for data centers to cover energy usage and grid upgrades. Ohio's utilities commission approved a tariff requiring large data centers to pay for at least 85% of their electricity capacity. Kentucky Governor Andy Beshear issued an executive order requiring developers to submit energy plans that do not raise ratepayer prices. Virginia has imposed a new electricity-use tax and, like Maryland, has seen calls for statewide moratoriums mostly deferred to local governments.
Despite near-unanimous support among Pennsylvania lawmakers to end tax breaks for data centers, the politically split General Assembly failed to pass such legislation before recessing for the summer. This legislative inaction prompted Governor Shapiro and others to take executive action to address the growing concerns about data centers' impact on communities, resources, and energy costs.