Josh Shapiro Signs Executive Order Imposing Nation's Strictest Rules on AI Data Centers in Pennsylvania

Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05 on Tuesday, imposing what he calls the nation's strictest regulations on AI data centers in the state.1

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The executive order requires companies setting up AI data centers in Pennsylvania to meet environmental safeguards, secure local community approval, and pay full utility costs before construction can begin.3

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Reversal From Earlier Data Center Support

The order marks a significant shift from Shapiro's previous stance. Last year, the Democratic governor praised Amazon's $20 billion planned investment in Pennsylvania for two data centers, the largest private investment in state history.1

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However, Shapiro said he "heard loud and clear from the people of Pennsylvania" about concerns over data center construction, prompting the regulatory crackdown.5

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"I showed up in communities and heard the concerns of neighbors," Shapiro explained on CBS Mornings, citing examples like a proposed data center at Eddie Staback Park in Lackawanna County that would have displaced parents watching their children's ball games.4

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GRID Requirements and New Restrictions

The framework, branded GRID for Governor's Responsible Infrastructure Development, rests on four principles: energy affordability, transparency and community engagement, workforce development, and environmental protection.2

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The order applies to data centers with peak electricity demand above 25 megawatts and establishes binding requirements rather than voluntary standards.3

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Developers must "pay the full cost of new electricity generation, transmission, distribution, and other infrastructure needed to power their project without shifting costs to Pennsylvania households and businesses," according to the order.2

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Removal From Fast Track Permit Program

The executive order immediately removes all data centers from Pennsylvania's Fast Track permit program, which Amazon used last year to secure approval for its $20 billion investment.5

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The order bars any office or agency under Shapiro's jurisdiction from signing nondisclosure agreements with data center developers, ending what Shapiro called excessive secrecy around these projects.1

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"Too often, developers refuse to give even basic info with neighbors -- like which tech company will occupy the AI data center or where the power will come from. That practice ends today," Shapiro stated.5

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Community Approval and Environmental Review

The order blocks environmental review until developers have secured local community approval first, shifting power to municipalities.2

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Pennsylvania's Department of Environmental Protection will not begin reviewing permit applications unless developers sign a consent order binding them legally to GRID requirements and have obtained all required local approvals.2

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"We will not be bullied by developers and bulldozed by the lawyers working for these big tech companies," Shapiro declared on social media platform X.1

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Utility Costs and Grid Impact Provisions

The ratepayer provisions carry significant financial teeth for Big Tech companies. The Special Counsel for Energy Affordability has been directed to write protocols under which data centers lose service before other customers during grid stress and to develop procedures charging data centers rather than ratepayers for reliability backstop auction costs.2

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This aligns Pennsylvania with federal efforts, as a bill introduced in June aimed to make Big Tech carry AI's power bills.2

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Wholesale power prices in PJM territory rose 76% year-over-year in the first quarter of 2026, reaching $136.53 per megawatt-hour, with PJM's independent market monitor attributing $7.3 billion of the last capacity auction's $16.1 billion total to data center load.2

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Mandatory Reporting and Transparency

Annual reporting of energy consumption, peak demand, total water use, and maximum-day water demand becomes mandatory for operating data centers.2

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Pennsylvania will create a public map of proposed facilities, and operating data centers must report their energy and water use beginning in July 2027.3

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The state has identified more than 100 data center proposals, with 15 having applied for Department of Environmental Protection permits and five having received all necessary approvals.2

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Growing National Backlash Against Data Center Construction

Opposition to rapid data center construction has grown steadily across the United States. A June Reuters/Ipsos poll found that only one-third of Americans approved of the pace of data center construction, while just 14% supported a data center being built in their community.1

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By August, at least 37 people had been arrested in protests tied to AI data centers across the country.3

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Shapiro cited Archbald, a borough of 7,500 people facing six proposed data center campuses, as an example of the local pressure driving his decision.2

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Pennsylvania's Strategic Position for Data Centers

Pennsylvania has become a sought-after location for AI data centers due to abundant natural gas from the Marcellus shale basin, existing power infrastructure, and proximity to major East Coast population centers.1

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The Homer City Energy Campus represents a $10 billion-plus development with 4.5 gigawatts of gas generation across 3,200 acres, illustrating the scale of projects under consideration.2

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However, this strategic advantage now comes with stringent guardrails on AI data centers that could reshape the state's data center landscape.

Legislative Vacuum and Executive Action

The executive order fills a legislative vacuum after four data center bills passed the Pennsylvania House but stalled in the state Senate.2

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These bills covered Public Utility Commission rules for loads above 25 megawatts, water-use notification thresholds, annual reporting with $10,000 daily penalties, and a model township ordinance.2

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Shapiro stated he had "no other option" but to sign the order given Senate Majority Leader Joe Pittman's inaction on bringing the House bill to a vote.5

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Broader Trend of State-Level Restrictions

Pennsylvania joins other states imposing new rules for AI data centers. New York enacted a statewide hyperscale moratorium of up to one year in July, while Texas paused data center interconnection approvals against roughly 474 gigawatts of pending requests.2

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In March, Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI signed a White House pledge to pay for new electricity generation and infrastructure needed for their data centers as costs rose.3

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These developments suggest restricting data centers and addressing community backlash have become priorities across multiple jurisdictions as AI infrastructure demands intensify.