HARRISBURG, PA — Gov. Josh Shapiro on Tuesday imposed new permitting, energy-cost and local-approval requirements on Pennsylvania data centers, using executive authority to make developers bear infrastructure costs and meet environmental and community standards as the industry rapidly expands across the state. Executive Order 2026-05 took effect immediately and applies to new data center permit applications.
The order directs the Pennsylvania Department of Environmental Protection to incorporate Shapiro’s Responsible Infrastructure Development, or GRID, requirements into its review of data center proposals. Developers seeking the standard review process must enter into legally enforceable agreements committing them to the requirements, while DEP will not issue permits until projects obtain all required local approvals.
Developers that decline to make that commitment face a more restrictive process: DEP will not begin reviewing their permit applications until they have secured all required local approvals and submitted every permit application needed for construction.
The policy represents a significant shift in Pennsylvania’s treatment of an industry whose electricity and infrastructure demands have generated concern among residents and policymakers. DEP is aware of more than 100 proposed data center projects identified in public databases, while 58 projects have engaged with the agency about permitting. Fifteen have applied for at least one DEP permit, and five have obtained all permits necessary for the first phase of development, according to the administration.
Under the GRID requirements, developers must pay the full cost of electricity generation, transmission, distribution and other infrastructure required to serve their projects rather than shifting those expenses to Pennsylvania households and businesses. Developers also must commit to community engagement, local hiring and training, community-benefit agreements and environmental standards that include water-conservation requirements.
“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,” Shapiro stated.
The order also removes all data center proposals from Pennsylvania’s Permit Fast Track Program and bars such projects from the expedited program going forward. It prohibits nondisclosure agreements involving data center projects and directs the Department of Community and Economic Development to develop guidance for municipalities on zoning standards and community-benefit agreements.
Data center operators will face new reporting requirements covering energy and water consumption. Information submitted to DEP must include annual energy and natural gas consumption, estimated hourly energy use during peak periods, annual water consumption and maximum daily water demand, as well as measures taken to protect against air and water pollution.
The administration also tied compliance to a state tax incentive. The Department of Revenue will revise guidelines for Pennsylvania’s Computer Data Center Equipment Exemption Program so applicants that fail to meet GRID requirements will not qualify for the existing sales and use tax exemption.
Electricity costs are another major component of the order. Shapiro’s Special Counsel for Energy Affordability will work with the Pennsylvania Public Utility Commission on policies intended to prevent data center growth from increasing costs or undermining reliability for other customers.
Those efforts include developing protocols under which data centers would lose electric service before other customers when the grid is stressed and procedures designed to make data centers, rather than other ratepayers, cover costs from PJM “reliability backstop” auctions used to secure generation needed to serve data center demand. The administration also wants procedures to improve forecasting and public disclosure of data center electricity demand.
“Growth should pay for growth, while we protect the reliability and affordability that Pennsylvanians depend on every day,” Pennsylvania Public Utility Commission Chairman Steve DeFrank stated.
The administration has also created a public map of proposed Pennsylvania data centers that have engaged with DEP, including the status of permits under agency review. The map is expected to be updated as DEP becomes aware of additional proposals.
The executive action comes amid a legislative dispute in Harrisburg over how Pennsylvania should regulate data center development. The Shapiro administration stated that the state House has advanced legislation addressing elements of the GRID framework while measures remain stalled in the Senate. Shapiro plans to continue seeking comprehensive legislation from the General Assembly.
Pennsylvania House Democratic leaders separately backed the executive order Tuesday, arguing that it builds on bipartisan measures passed by the House addressing local control, electricity rates and water protections. They blamed Senate Republicans for failing to advance legislation and characterized executive action as necessary while those measures remain pending.
The new requirements seek to balance Pennsylvania’s competition for data center investment with concerns over the industry’s demands on the electric grid, water supplies and local infrastructure. The administration’s GRID framework centers on energy affordability, transparency and community engagement, workforce and economic development, and environmental protection.
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