Shapiro signs order to control data center growth in Pennsylvania

Pennsylvania Gov. Josh Shapiro signed an executive order Tuesday aimed at controlling the growth of data centers in the state. 

The Governor’s Responsible Infrastructure Development (GRID) Requirements were written to block what he called speculative, irresponsible data center projects from moving forward. 

He said GRID requirements would also give local communities more power over data center development. 

In remarks Shapiro made at the signing, he noted that such technology is moving rapidly. 

“Last summer, I announced two projects that will bring thousands of new jobs and $20 billion in new investment to Pennsylvania in Salem Township, Luzerne County, and Falls Township, Bucks County, Shapiro said. “Since then, we’ve seen an unacceptable number of speculative proposals for data centers swamp our cCommonwealth.” 

According to Shapiro, there are currently reports of more than 100 data center proposals under discussion in Pennsylvania. 

“Most of those proposals are completely speculative, and many of them haven’t taken any formal steps to apply to the cCommonwealth and will never be built,” Shapiro noted. “They lack detailed plans, have insufficient financing, don’t have access to the electricity they actually need to build these centers, and have no agreement with a tech company to use the space once it’s built.” 

Shapiro said he made the executive order because while the House passed the GRID Requirements on a bipartisan basis to put those standards in place, the Senate has not brought it up for a vote. 

“The absence of legislative approval has left me with no other option but to protect the people of Pennsylvania by taking executive action to put the strictest guardrails in the nation in place to stop the predatory developers and bad proposals,” Shapiro said. 

Under the executive order, developers will be required to provide a notice of intent to comply with GRID. 

They will be required to present their detailed plans to DEP, who will scrutinize them to ensure they’re sufficient. 

Developers must also sign a legally binding consent order, locking them into the GRID Requirements and setting penalties if they fail to comply. 

Requirements include developers being required to bring their own power and pay for all the costs associated with that electricity.  

They must also get an increasingly significant portion of that power from clean energy sources like solar, advanced nuclear, and battery storage. 

They also need to earn legal approval at the local level. 

“If the local community doesn’t approve a project, the state won’t approve it either,” Shapiro said. 

If a developer refuses to comply with those requirements, Shapiro said they will not be able to obtain the necessary approvals needed to build a data center in the state and they will be disqualified from receiving the existing exemption on sales tax on data center equipment. 

The state is also removing all data centers from the Fast Track permitting program. 

Shapiro said that while the Fast Track permitting has proven to be an asset in helping the state land major economic development projects like Eli Lilly‘s investment in the Lehigh Valley, it’s not right for this kind of development.