Governor’s Executive Order Regulates Data Centers
Amber Paulino
On August 18, 2026, Governor Josh Shapiro issued Executive Order (“EO”) 2026-05 which establishes stricter requirements for data center development in Pennsylvania. EO 2026-05 creates a new process for large data centers, specifically projects expected to use more than 25 megawatts of electricity. Data center developers can now choose to follow the Governor’s Responsible Infrastructure Development (“GRID”) requirements by signing an agreement with the Department of Environmental Protection (“DEP”). Projects that follow these requirements can have their permits reviewed as they are submitted, but they must first show that the project complies with local plans and has received all required local approvals. Developers that elect not to meet the GRID requirements face a longer permitting process and must obtain local approvals and any required water permits before the DEP will begin reviewing their applications. The EO also removes data centers from Pennsylvania’s Permit Fast Track Program and requires the state’s data center tax exemption program to include the GRID Requirements.
EO 2026-05 further requires more information about data centers to be made available to the public. Additionally, state agencies are no longer permitted to use nondisclosure agreements for data center projects, and the DEP must create a public online map showing proposed data centers and their permitting status. Starting July 1, 2027, existing data centers must provide annual reports about how much electricity, natural gas, and water they use, how much electricity they need at peak times, and what they are doing to reduce their energy and water use or environmental impacts. The reports must also include information about new sources of electricity, waste-heat recovery, and expected energy and water use in the following year.
The EO directs state officials to develop policies that would make data centers responsible for certain costs associated with their use of the electric system. This includes costs
for connecting data centers to the grid and certain regional electricity reliability costs, rather thanpassing those costs on to other customers. The EO directs the Pennsylvania Public Utility Commission to consider rules that would allow utilities to reduce or shut off electricity to datacenters before other customers during certain emergencies, unless the data center has secured enough additional electricity capacity. The DEP must also consider whether new environmental rules are needed for data center backup generators, while the Department of Community and Economic Development must develop guidance for local governments on zoning and agreements that provide benefits to communities hosting data centers.
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