Governor Josh Shapiro Tightens Pennsylvania Data Center Regulations

Governor Josh Shapiro signed Executive Order 2026-05 on August 19, 2026, establishing the Governor’s Responsible Infrastructure Development (GRID) standards to regulate hyperscale AI data centers. The order targets projects with peak demand exceeding 25 MW, requiring developers to procure their own incremental electric capacity and pay all interconnection and network upgrade costs. Clean energy requirements for these projects scale from 10% by 2027 to 32% by 2035.

Under the new rules, the Pennsylvania Department of Environmental Protection will only review permits for non-compliant projects after all local land-use and water authorizations are secured. Shapiro removed all AI data centers from the state's Fast Track permitting program and prohibited non-disclosure agreements between developers and public officials. Developers who fail to meet GRID standards lose eligibility for a 6% sales tax exemption on high-tech equipment.

Industry representatives from the Data Center Coalition warned that changing rules midstream could stifle investment and job creation. Conversely, the Conservation Voters of Pennsylvania supported the move as a way to remove speculative developers. Some community advocates, including the Better Path Coalition, dismissed the order as political theater, arguing that only a full statewide moratorium would protect residents from environmental impacts.

Parallel to these state actions, PJM Interconnection, the regional grid operator, requested Federal Energy Regulatory Commission approval for new measures to curb data center energy demand. PJM proposed a secondary auction for data centers to address a projected 6-gigawatt shortage, noting that current rapid load growth is not sustainable.