Pennsylvania Governor's Data Center Executive Order Creates New Requirements
Pennsylvania Governor Josh Shapiro signed an executive order heavily restricting data centers in the state, tying compliance to a 6% sales tax exemption. The order mandates local approval, developer commitments to guidelines covering power, local hiring, transparency, and water conservation standards. State Representative Chad Reichard questioned the effectiveness of the grid requirements, citing concerns about increased solar development on agricultural land due to incentives.
Pennsylvania Governor Josh Shapiro issued an executive order last week that introduces significant restrictions for data centers operating within the state. The order mandates that data center projects receive approval from local officials and requires developers to commit to specific guidelines. These guidelines, outlined by Shapiro earlier in the year, include provisions for data centers to fund their own power infrastructure, prioritize local hiring, maintain transparency, and adhere to water conservation standards. Compliance with these requirements is tied to a 6% sales tax exemption on data center equipment, which was previously passed by the General Assembly.
State Representative Chad Reichard expressed support for municipal-level moratoria, citing a recent vote to grant municipalities six months to pause data center proposals while updating their zoning and land-development ordinances. However, Reichard critically assessed Governor Shapiro's new grid requirements, calling the plan a "paper tiger." He argued that the 6% sales tax exemption might be too insignificant to incentivize major tech companies like Microsoft, suggesting it would be a "rounding error" for them.
A key concern for Reichard is the order's provision requiring data centers to source an increasing percentage of their electricity from Pennsylvania, eventually reaching approximately 32%. He warned that this emphasis on renewable energy could inadvertently escalate pressure for more solar development, particularly in agricultural regions like Franklin County. Reichard noted that existing state and federal subsidies already give solar developers an advantage in acquiring prime farmland, and he fears the new policy will exacerbate this trend. Michele Jansen of News Talk 103.7FM commented that the restrictions might simply drive data centers to other states, potentially harming Pennsylvania's economic development.