Governor releases GRID standards to control data center development

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As public concern grows over the rapid development of data centers, Pennsylvania Gov. Josh Shapiro has put out a document detailing development standards. 

Shapiro on Wednesday unveiled the full Governor’s Responsible Infrastructure Development (GRID) Standards, establishing what he called guardrails and accountability standards for data center development in the state.  

First introduced in the Governor’s 2026-27 budget address, the GRID Standards set expectations for developers seeking support from Pennsylvania — including coordinated project support through the Commonwealth’s Office of Transformation and Opportunity (OTO), greater speed and certainty in permitting, and access to state tax incentives. 

The GRID Standards outline specific steps data center developers must take to demonstrate that proposed projects provide real value to local communities, mitigate or offset any impacts on Pennsylvanians, and are being developed responsibly. 

“As Pennsylvania continues to compete for major economic development projects and lead on innovation, we have a responsibility to set strict accountability standards and ensure these projects create real opportunity for our communities,” said Shapiro. “I’ve heard directly from Pennsylvanians who are concerned about the impact data center development could have on their communities, the environment, and their utility bills.”  

The GRID Standards require developers seeking Pennsylvania’s support to submit a joint application for GRID Certification to the Office of Transformation and Opportunity (OTO) and the Department of Revenue (DOR) outlining how they will meet four standards: protecting energy affordability, promoting transparency and community engagement, supporting the workforce and economic development, and protecting the environment. 

“Companies and developers are looking to build data centers all across the country, and Pennsylvania is uniquely positioned to be selective on which projects can bring economic opportunity to our Commonwealth without hurting local communities,” said Pennsylvania Department of Community and Economic Development Secretary Rick Siger. “The Shapiro Administration is focused on supporting good projects here in Pennsylvania by setting strict standards that require developers to pay entirely for their own energy needs, meet our environmental requirements, create local jobs, and deliver millions in additional tax revenue to our cities, townships, and boroughs.” 

If the application meets the requirements laid out in the GRID Standards, OTO and DOR will grant the project GRID certification and it will become eligible to participate in OTO’s PA Permit Fast Track Program, which streamlines permitting for high-impact economic development and infrastructure projects requiring permits from multiple Commonwealth agencies. 

Currently, data center developers must be certified through DOR to qualify for a sales and use tax exemption for the Computer Data Center Equipment Exemption Program under Act 25 of 2021.  

This program provides an exemption from Pennsylvania sales tax when computer data center equipment is sold to, used, or consumed in a certified data center by an owner, operator, or qualified tenant.  

As part of the GRID Standards, the administration is calling on the General Assembly to pass legislation amending that tax benefit.  

Once this legislation is signed into law, developers will be required to secure GRID certification in order to be eligible for tax benefits for the purchase of computer data center equipment. 

If left unchanged, he said the current sales and use tax exemption is projected to cost Pennsylvania more than $517 million annually by FY 2030-31.  

According to a release, OTO will post detailed information about each project that earns GRID certification on its website.  

Once operational, projects must provide annual reporting and third-party-validated documentation to maintain GRID certification and associated tax benefits on an ongoing basis. If the developer fails to meet requirements, DOR may revoke GRID certification and recapture all or part of the tax benefits provided. 

Shapiro said is administration is working with leaders in the General Assembly to introduce accompanying legislation that will codify the GRID Standards into law.