Pennsylvania Restricts AI Data Center Permits and Imposes Grid Cost Requirements
New Executive Order Targets Facilities Exceeding 25 Megawatts of Power Demand
Large data center developments in Pennsylvania face immediate restrictions under an executive order signed Tuesday by Governor Josh Shapiro. The measure targets facilities with peak power consumption over 25 megawatts, stripping them of fast-track state permitting privileges and shifting utility expansion costs to project developers.
Executive Order 2026-05 establishes new requirements for data centers with peak electricity demand above 25 megawatts. Developers seeking a streamlined state review must agree to Pennsylvania’s environmental, energy, workforce, and community requirements and obtain necessary local approvals.
State agencies are prohibited under the order from executing non-disclosure agreements with data center operators. More than 100 facilities have been proposed across Pennsylvania, though the Department of Environmental Protection has received formal permit filings for 20 sites.
Annual reporting of energy and water consumption will become mandatory for operating data centers starting in July 2027. Public mapping systems managed by the state will track all proposed development locations across municipalities including Archbald and Montgomery County.
The executive order also directs the state’s Special Counsel for Energy Affordability to seek utility rules making data centers cover certain grid costs and face curtailment first during some emergencies unless they secure enough power to meet their demand.
Regional grid operator PJM Interconnection oversees wholesale power distribution across Pennsylvania and twelve neighboring states. Grid reliability evaluations by PJM show massive surge projections in peak electricity demand driven by artificial intelligence compute infrastructure, triggering state-level reviews of cost allocation models before the Pennsylvania Public Utility Commission.
“I’m putting these developers on notice and letting them know that we will not let them bully Pennsylvanians, disregard our constitutional right to clean air and pure water, and drive up our utility bills,” Shapiro wrote on X. “I’m using the full weight of my executive authority to block the objectionable, unwarranted projects and put the nation’s strictest set of protections in place.”
Nationwide scrutiny over data center energy demands reached federal levels earlier this year when technology companies signed a White House agreement to finance dedicated power generation assets. In January, research from the Brookings Institution indicated that municipal zoning hurdles and grid capacity constraints could delay large-scale artificial intelligence deployments across multiple regional markets.
