Gov. Shapiro signs executive order on data center development in Pennsylvania

WILKES-BARRE — Gov. Josh Shapiro on Tuesday reiterated his ethos — that Pennsylvania is open for business — but he put a slight twist on it at a news conference addressing his policy on data center developments.

“Yes, Pennsylvania is open for business,” Shapiro said. “But it is not open for business at the expense of everyday Pennsylvanians.”

The governor signed an executive order (EO) Tuesday on data center development in Pennsylvania, making it clear where his administration stands on an issue that has been impacting communities across the commonwealth.

The executive order has several strict requirements, including removing all artificial intelligence (AI) data center proposals from the PA Permit Fast Track permitting process and prohibiting the use of nondisclosure agreements for data center projects.

“Over the past year, I’ve listened to the people of Pennsylvania — and I’ve heard directly from many residents across our Commonwealth who are concerned about what data center development could mean for our communities, our environment, and our utility bills,” Shapiro said. “My message to data center developers is clear — if you can’t agree to our strict requirements and get the community where you want to build to say ‘yes,’ you’re not going to have the Commonwealth’s support either.

“These are some of the biggest companies in the world — they can afford to be good neighbors, follow the rules, and do this right.”

This executive order lays out strict requirements that data center developers must meet regarding energy affordability, community engagement, workforce and economic development, transparency, and environmental protection — and gives local municipalities a greater say over development in their communities.

The EO demands data center developers comply with strict requirements and further blocks “speculative and irresponsible” data center projects, giving local communities more power over data center development, and protecting Pennsylvania residents.

Shapiro said the EO directs the Department of Environmental Protection to only review permit applications if developers have made a legally binding commitment to meet the Governor’s Responsible Infrastructure Development (GRID) Requirements and have received local approval.

The GRID Requirements demand developers meet strict standards on energy affordability, environmental protection, workforce and economic development, transparency, and community engagement.

Establishing strict guardrails

The EO directs the Pennsylvania Department of Environmental Protection (DEP) to incorporate the GRID Requirements into the agency’s permit review process for all data center proposals. Projects will be required to make legally enforceable commitments to meet the stringent standards established in GRID via a Consent Order and Agreement (COA).

For those projects, DEP will continue to review qualifying permits as the applications are submitted and found to be compliant under Pennsylvania law.

However, as a change from current practice, DEP will not issue any permit unless the project has received all required local approvals. Permits will incorporate the GRID Requirements as warranted.

For developers who do not agree to meet the Governor’s GRID Requirements, DEP will not begin review of permit applications until after all required local approvals are secured and every permit application required for construction of the data center has been reviewed and found to be compliant by DEP. The new permit review process will apply to all new data center permit applications going forward.

In addition, the Department of Revenue (DOR) will update the Computer Data Center Equipment Exemption Program Guidelines to ensure applicants for the sales and use tax exemption also comply with the GRID Requirements.

The GRID Requirements stipulate that developers must:

• Pay the full cost of new electricity generation, transmission, distribution, and other infrastructure needed to power their project without shifting costs to Pennsylvania households and businesses;

• Commit to open, transparent engagement with local residents and leaders including detailed community outreach plans that include notification to impacted local governments, public meetings, and consultation early enough in the process to allow meaningful public input on major design decisions;

• Hire and train local workers and enter into meaningful community benefit agreements that invest in local priorities, from schools and infrastructure to long-term economic development; and

• Meet the highest standards for environmental protection, including strict water conservation requirements.

Listening to the people of Pennsylvania

The Governor said he is taking this bold action as the number and scale of proposed projects has grown rapidly and Pennsylvanians have expressed concerns about how new data center development could affect their communities, energy costs, air and water, and infrastructure.

In May, Shapiro visited Archbald, where he heard from concerned residents about the potential impact of multiple data center proposals in the borough.

In the last year, DEP has become aware of an unprecedented number of data center proposals, with more than 100 projects reported in publicly sourced databases, and 58 projects engaged with DEP to discuss permitting at some level of formality. Of those projects, 15 have applied for at least one DEP permit, and only five have received all necessary permits required for their first phase of development.

Effective immediately, Executive Order 2026-05 directs commonwealth agencies to take concrete actions to weed out speculative proposals and hold bad actors accountable for their attempts to run roughshod over Pennsylvania communities.

Data center operators will be required to submit to DEP information on energy and water consumption with measurements including total energy consumption and total natural gas consumption for the previous calendar year; estimated average amount of energy usage per hour during the data center’s peak; total water consumption for the previous calendar year, along with the maximum day demand; and any measures taken to protect the environment and public from polluted water or air.

Shapiro said the executive order sends a clear message — developers must demonstrate that a project can be developed responsibly and the community approves of the project in order to move forward.

Shapiro takes action after Senate Republicans ‘fail to act’

Shapiro said he has repeatedly called on the Pennsylvania General Assembly to establish clear, enforceable protections for Pennsylvanians as data center development accelerates.

He said while the House has advanced numerous pieces of legislation to codify the GRID requirements, Senate Republican leaders have refused to take action on data center protections.

Shapiro said he will continue to call on the General Assembly to enact comprehensive, enforceable standards for responsible data center development.

As demand for artificial intelligence and data center infrastructure continues to grow, Shapiro said these guardrails will ensure Pennsylvania remains competitive for major investment opportunities while requiring developers to meet clear standards that protect ratepayers, local communities, workers, and the environment.

“If data center developers want Commonwealth support, they have to meet GRID Requirements, be good neighbors, and respect the communities where they want to build,” Shapiro said.

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