Pennsylvania: Costs and Transparency Required for Data Centers

Pennsylvania Tightens Access to the Grid for Future Data Centers with Immediate Executive Order

Pennsylvania has tightened access to the grid for future data centers through an executive order that takes effect immediately and without going through the legislature. The measure combines contractual commitments to GRID requirements, the end of NDAs in administration, disclosure obligations, and requests to regulators for data centers to be the first to be curtailed during peak demand. This applies to new applications and is supported by a standard agreement already published.

Pennsylvania Requests Cuts First from Data Centers

The order sends the State Energy Accessibility Advisor before the Public Utility Commission with three concrete requests. It asks that the costs of PJM's reliability relief auctions be recovered from data centers rather than other subscribers, that the demand from data centers be accurately anticipated and made public, and that these facilities be the first to lose power when the grid is under pressure. PUC Chairman Steve DeFrank summarized the philosophy in one sentence: "growth must pay for growth."

Support, Criticism, and Political Timeline Surround the Decision

Josh Shapiro previously supported a $20 billion commitment from Amazon for sites in Bucks and Luzerne counties, asserting to developers that the largest companies "can afford to be good neighbors, follow the rules, and do things right." He is playing for re-election in November. In the legislative arena, the House passed a bipartisan bill to enshrine GRID into law, but Senate Republicans refused to put it on the agenda. Majority Leader Joe Pittman suggested that the governor's comments aimed "to erase his remarks from last year." Conversely, the organization Food & Water Watch deemed the order "too little, too late," noting that the tax incentive on sales remains.

End of Public NDAs and Publication of Usage Data

The use of non-disclosure agreements by Commonwealth agencies in data center projects is coming to an end. NDAs have become common practice during site selection, leading to a lack of information for residents regarding the load, the amount of water used, or the true identity of the host; according to the executive, this lack of transparency has fostered certain abuses. Two new transparency requirements are being established: operators must disclose annual energy and natural gas consumption, estimated average hourly consumption during peaks, total water used, and maximum daily demand, as well as actions taken against air and water pollution. An interactive map of projects registered with the DEP now allows tracking of permit application progress. Published figures indicate over 100 projects listed in public databases, with 58 having approached the DEP, 15 having submitted applications, and five having everything needed for a first phase.

GRID: Network Costs Fully Borne and Local Anchoring Required

Adherence to GRID requires developers to bear all costs of generation, transmission, and distribution related to their needs, rather than passing them on to households and businesses. It also mandates sufficient early consultation to influence local design, recruitment, and training, the conclusion of community benefit agreements, and compliance with water conservation standards. The Department of Revenue applies the same eligibility filter for sales and use tax exemptions on equipment.

A Contractual Procedure, Immediate Effect

Signed in Harrisburg and immediately applicable to all new applications, Executive Order 2026-05 relies on existing permitting powers, without new legislation. The DEP will only review an application if the developer has committed to GRID requirements through a Consent Order and Agreement and has already obtained local approval; a model agreement was published on the same day.

In practice, the sequence begins with the signing of a contract setting conditions and penalties, followed by obtaining local permits and approvals before any state review. Developers who do not sign are not prohibited, but their applications will not be opened until these steps are completed, reversing the usual industry timeline. All data center proposals have also been permanently removed from Pennsylvania's permit acceleration program.

Elsewhere: Thresholds, Taxes, and Multi-Year Obligations

Twenty-seven U.S. states have studied legislation on heavy loads. California, Ohio, and Utah have enacted stricter laws than the Ratepayer Protection Pledge, a commitment signed by developers at the White House in March, which lacks enforceability. In New Jersey, the Data Centre Fair Share Act requires sites exceeding 50 MW to cover at least 85% of projected energy costs over a ten-year period, while Virginia imposes a tax set at $0.011 per kWh. In 2025, nearly 48 projects, representing an investment potential of $156 billion, were halted or slowed due to local opposition.

Pennsylvania stands out for its lack of new legislation, moratorium, or tax reform: it mobilizes its permitting prerogatives, ties penalties through contracts, and makes operational data public. The model consent order is already available online.