Pennsylvania Gov. Josh Shapiro has signed an executive order directing Commonwealth agencies to require all data center proposals applying for permits with the Commonwealth to comply with the Governor's Responsible Infrastructure Development (GRID) Requirements, “blocking speculative, irresponsible data center projects from moving forward, giving local communities more power over data center development, and protecting Pennsylvania residents,” his office said on Aug. 18.
The Executive Order directs the Department of Environmental Protection (DEP) to evaluate permit applications from proposed data centers only if developers have made a legally binding commitment to meet the Governor’s GRID Requirements and have received local approval.
The 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 Governor is also immediately removing all AI data center projects from the PA Permit Fast Track Program and will not consider data center projects for the program going forward.
Further, the Executive Order implements new public transparency requirements for developers and makes clear that the use of nondisclosure agreements with data center projects is not permissible.
Establishing Strict Guardrails for Data Center Development
The Executive Order directs the 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 that 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 Pennsylvania 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.
In the last year, DEP has become aware of an unprecedented number of data center proposals, with over 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," a news release said.
