Pennsylvania tightens data-center rules as local backlash spreads

Pennsylvania Gov. Josh Shapiro signed Executive Order 2026-05 on August 18, requiring AI data-center developers to meet the state's GRID requirements—including providing their own power, obtaining local approval, and offering community benefits—before state permits are reviewed, a move that removes such projects from the Permit Fast Track Program and prohibits nondisclosure agreements. The state is aware of at least 100 proposed data centers, but no AI data center is currently operational, and the order responds to local backlash in communities like Archbald, where six proposed campuses would cover about 14% of the borough's land.

Pennsylvania tightens data-center rules as local backlash spreads - Pennsylvania says it is aware of at least 100 proposed data centers, but most have not formally approached the state or taken meaningful steps toward development. The state says no AI data center is currently operational. <sup \ 2\ https://www.pa.gov/governor/topics/data-centers </sup - Shapiro’s GRID requirements call for developers to provide or pay for their power, secure local approval, disclose project details, hire locally and offer community benefits. <sup \ 3\ https://www.pa.gov/governor/newsroom/2026-press-releases/gov--shapiro-s-remarks-at-signing-ceremony-for-an-exec--order-on </sup - In Archbald, six proposed campuses would contain 51 warehouse-scale buildings and cover about 14% of the borough’s land, according to reporting based on project plans. <sup \ 4\ https://www.washingtonpost.com/nation/2026/04/26/archbald-pennsylvania-data-centers/ </sup - The Pennsylvania fight is part of a wider backlash over electricity costs, water use, noise, tax incentives and land-use changes. <sup \ 8\ https://apnews.com/article/ai-data-centers-governors-pennsylvania-texas-shapiro-abbott-f96176c2bcb76cbe8e823ed79fbdf196 </sup Pennsylvania Gov. Josh Shapiro is moving to block speculative AI data-center projects and require developers to absorb the infrastructure costs they create, putting the state at the center of a growing political backlash against the server campuses that power artificial intelligence and cloud computing. \ 1\ https://www.cnbc.com/2026/09/01/data-center-pennsylvania-shapiro-trump.html In remarks surrounding his August 18 executive order, Shapiro said too many developers were treating local communities as obstacles. He cited proposals in Archbald, Lackawanna County, and Montgomery County, where he said developers were pushing projects despite opposition from residents and local officials. \ 3\ https://www.pa.gov/governor/newsroom/2026-press-releases/gov--shapiro-s-remarks-at-signing-ceremony-for-an-exec--order-on A binding state process replaces the fast track Executive Order 2026-05 directs Pennsylvania’s Department of Environmental Protection to review data-center permit applications only after developers make a legally binding commitment to meet the governor’s Responsible Infrastructure Development, or GRID, requirements and obtain local approval. The order removes AI data-center proposals from the state’s Permit Fast Track Program and prohibits nondisclosure agreements for data-center projects. \ 2\ https://www.pa.gov/governor/topics/data-centers The requirements cover energy affordability, transparency and community engagement, workforce and economic development, and environmental protection. Developers must submit plans to state agencies and sign a consent order that can include penalties for noncompliance. \ 3\ https://www.pa.gov/governor/newsroom/2026-press-releases/gov--shapiro-s-remarks-at-signing-ceremony-for-an-exec--order-on The energy provisions require developers to bring their own power or pay the full cost of electricity associated with their projects. They also call for an increasing share of clean generation, including solar, advanced nuclear and battery storage. Projects must provide local hiring and community-benefit commitments, and developers that do not comply can lose access to Pennsylvania’s sales-tax exemption for data-center equipment. \ 3\ https://www.pa.gov/governor/newsroom/2026-press-releases/gov--shapiro-s-remarks-at-signing-ceremony-for-an-exec--order-on The order is not a statewide moratorium. It makes state permitting and incentives conditional on local approval and compliance with the GRID framework. A separate Senate bill proposing a three-year moratorium was referred to committee on June 4 and has not advanced beyond that action. \ 11\ https://www.palegis.us/senate/co-sponsorship/memo?memoID=48899 Archbald became the political test case Shapiro has repeatedly pointed to Archbald, a Lackawanna County borough of roughly 7,000 people, where six proposed campuses would contain 51 warehouse-scale buildings. If all were built, the projects would occupy about 14% of the borough’s 17-square-mile area, according to The Washington Post. \ 4\ https://www.washingtonpost.com/nation/2026/04/26/archbald-pennsylvania-data-centers/ Residents have organized through groups including the Archbald Neighborhood Association and Stop Archbald Data Centers. They have raised concerns about land clearing, noise, air quality, water use, power infrastructure and the effect of industrial campuses on nearby homes and public spaces. At least one developer has pursued litigation amid the local fight, while borough officials have faced pressure over zoning and conditional-use decisions. \ 8\ https://apnews.com/article/ai-data-centers-governors-pennsylvania-texas-shapiro-abbott-f96176c2bcb76cbe8e823ed79fbdf196 Another prominent dispute centers on Project Hazelnut in Hazle Township, a proposed NorthPoint Development campus in Luzerne County. NorthPoint announced a $165 million community-benefit initiative in June, including grants for eligible households, as it revised the proposal amid sustained opposition. That figure is a developer-announced commitment, not an independently verified estimate of the project’s eventual local economic impact. \ 12\ https://projecthazelnut.com/updates/press-release-may-2026 The conflicts expose the questions municipalities must answer before approving projects: who pays for substations and transmission upgrades, whether a site has dependable power, how much water cooling systems consume, and what happens if a proposed campus never secures financing or a customer. Shapiro said some proposals lack financing, power access or a technology company committed to lease the space. \ 3\ https://www.pa.gov/governor/newsroom/2026-press-releases/gov--shapiro-s-remarks-at-signing-ceremony-for-an-exec--order-on Power and water are driving the dispute Pennsylvania has strong reasons to attract large computing facilities. A 2026 Pittsburgh Technology Council study estimated that more than 7,196 megawatts of announced data-center projects were planned across the state through 2036, with 49 megawatts under construction for 2027. Those are announced-project estimates, not a forecast that all proposals will be built. \ 6\ https://www.rural.pa.gov/download.cfm?file=Resources/PDFs/news/Data+Centers+-+Part+I+Hearing+Testimony+Highlights.pdf State testimony shows why the numbers have become politically sensitive. PJM officials told a Pennsylvania rural-policy hearing that data-center growth was contributing to higher electricity demand and urged states to direct grid costs toward large-load customers rather than residential ratepayers. The Susquehanna River Basin Commission said a hyperscale campus using evaporative cooling could consume millions of gallons of water per day. \ 6\ https://www.rural.pa.gov/download.cfm?file=Resources/PDFs/news/Data+Centers+-+Part+I+Hearing+Testimony+Highlights.pdf The same hearing included an industry view. The Data Center Coalition said Pennsylvania’s data-center sector supported 99,150 total jobs and $8.35 billion in annual labor income in 2023, while generating $2.62 billion in state and local tax revenue. Those figures were presented by an industry representative and should not be treated as an independent assessment. \ 6\ https://www.rural.pa.gov/download.cfm?file=Resources/PDFs/news/Data+Centers+-+Part+I+Hearing+Testimony+Highlights.pdf One major project is Amazon’s planned Pennsylvania expansion. In June 2025, Amazon announced at least $20 billion for two data-center campuses in Salem Township, Luzerne County, and Falls Township, Bucks County. The company and state officials said the investment would create at least 1,250 jobs across the projects, including construction and permanent positions. <sup \ 5\ https://dced.pa.gov/newsroom/governor-josh-shapiro-announces-amazon-plans-to-invest-20-billion-in-pennsylvania-for-ai-infrastructure-in-largest-capital-investment-in-commonwealth-history/ </sup A Pennsylvania hearing document says the Susquehanna River Basin Commission has issued one hyperscale data-center permit to date, for Amazon Data Services in Luzerne County, authorizing 129,000 gallons per day with hybrid cooling. \ 6\ https://www.rural.pa.gov/download.cfm?file=Resources/PDFs/news/Data+Centers+-+Part+I+Hearing+Testimony+Highlights.pdf The state fight reflects a national reversal Pennsylvania’s approach follows a wider shift from competing to attract data centers toward conditions on where they can build and how much they must pay. The National Conference of State Legislatures lists proposals or enacted measures involving moratoriums, interconnection limits, tax incentives and local authority in states including Oklahoma, South Carolina, Virginia and Pennsylvania. \ 9\ https://www.ncsl.org/fiscal/which-states-are-banning-data-centers Texas, another major AI-infrastructure market, has also become a political fault line. Reuters reported on September 3 that Gov. Greg Abbott and Attorney General Ken Paxton were calling for tougher regulation, changes to tax incentives and restrictions on rural development after previously promoting Texas as an AI hub. \ 10\ https://www.investing.com/news/stock-market-news/texas-republicans-turn-against-data-centers-putting-big-tech-on-notice-4887342 The backlash has public support. Gallup reported in May that 70% of Americans opposed building an AI data center in their local area, including 48% who strongly opposed the idea. <sup \ 7\ https://news.gallup.com/poll/709772/americans-oppose-data-centers-area.aspx </sup President Donald Trump responded in late August by arguing that communities rejecting data centers risked becoming “backwards and poor,” putting him at odds with state officials from both parties who are trying to address local concerns. \ 8\ https://apnews.com/article/ai-data-centers-governors-pennsylvania-texas-shapiro-abbott-f96176c2bcb76cbe8e823ed79fbdf196 Pennsylvania’s immediate test is implementation. The executive order gives local approval a gatekeeping role, but it does not resolve how municipalities should compare electricity, water, environmental and tax impacts across projects that vary widely in size and financing. The administration has released a local-government toolkit, while the Senate has yet to advance the governor’s GRID legislation. \ 2\ https://www.pa.gov/governor/topics/data-centers \ 11\ https://www.palegis.us/senate/co-sponsorship/memo?memoID=48899 Companies mentioned Further sources The stories that matter, in one email. Free — unsubscribe anytime.