Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05 on August 18, restricting data center development across the state through new permitting requirements and mandatory compliance standards, marking a significant policy reversal after initially championing the industry with a $20 billion Amazon commitment.
The executive order removes all AI data center proposals from Pennsylvania’s Fast Track permitting program and prohibits the use of nondisclosure agreements with data center projects. It directs the state Department of Environmental Protection to review permit applications only if developers have made legally binding commitments to meet the Governor’s Responsible Infrastructure Development (GRID) Requirements and have secured local approval.
GRID standards require data center developers to pay the full cost of electricity generation, transmission, and distribution infrastructure; commit to transparent community engagement with early public notification; hire and train local workers through community benefit agreements; and meet strict water conservation and environmental protection standards. Data center operators will also be required to submit annual reports to DEP on energy and water consumption.
The shift reflects mounting public opposition to rapid data center expansion. A June Quinnipiac University poll found that 76 percent of Pennsylvania registered voters oppose data centers in their communities, and only 24 percent approve of how Shapiro is handling the issue. The governor acknowledged this pressure during the signing ceremony in Harrisburg, stating: “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.”
Pennsylvania has become a top target for data center projects due to its proximity to major metropolitan areas, energy production capacity, and rural land availability. According to Shapiro’s administration, over 100 data center projects have been proposed in the state, with 58 engaged with DEP at some level of formality. Of those, 15 have applied for at least one DEP permit, and only five have received all necessary permits for their first phase of development.
Why the Restrictions Matter
Data centers consume vast amounts of electricity and water. A single large facility can evaporate 1 to 5 million gallons of water daily for cooling, according to Governor Shapiro’s office. The rapid proliferation of AI data centers nationwide has raised concerns about grid strain and energy affordability. The Electric Power Research Institute estimates that data centers could grow to consume up to 9 percent of U.S. electricity generation annually, competing with household and business power needs.
Shapiro’s administration appointed a Special Counsel for Energy Affordability to work with the Pennsylvania Public Utility Commission to ensure data center development does not shift energy costs onto Pennsylvania households and businesses. The counsel will support protocols to prioritize residential and business electricity service over data center supply during grid stress.
Other states have also begun restricting data center expansion. California, Iowa, and Michigan have introduced legislation addressing data center water usage, and over 200 local moratoriums and restrictions across 30 states now limit data center construction, according to ElectricChoice. Some towns, including Warrenton, Virginia, and Big Rapids Township, Michigan, have removed data centers as a permitted use, effectively banning new projects.
Shapiro’s order includes a severability clause—uncommon in executive orders—suggesting his administration anticipated legal challenges from the data center industry. The Data Center Coalition, representing Amazon, Microsoft, and other major developers, criticized the order for changing rules “midstream” for “verified and responsible data center projects,” though Amazon’s existing Pennsylvania projects will be required to comply with GRID standards going forward.
Sources
- Commonwealth of Pennsylvania — official text and details of Executive Order 2026-05, GRID Requirements, and the number of proposed projects in the state
- Philadelphia Inquirer — Shapiro’s policy shift, public polling data, Amazon commitment details, and industry response
- Natural Resources Defense Council — statement on GRID standards and data center environmental impacts
- Electric Power Research Institute — projection of data center electricity consumption reaching 9 percent of U.S. generation
- ElectricChoice — data on state and local moratoriums on data center development
