Browse
Log in / Register
Share
March 25, 2025 – Governor Josh Shapiro’s sweeping executive order on data center development in Pennsylvania is designed to rein in a boom that has alarmed local communities and environmental groups. But the order stops short of a moratorium, instead creating a two-tier permitting system that rewards compliance with the state’s GRID standards and punishes projects that refuse to sign on.
The order, signed last week, applies to any data center with a peak demand over 25 megawatts – effectively covering all but the smallest facilities. It requires developers to obtain local zoning approvals before they can apply for state permits, bans state agencies from signing nondisclosure agreements tied to data centers, and turns the state’s lucrative sales tax exemption into a reward for following the new rules.
The most immediate impact is the creation of two permitting tracks. Developers who sign a “consent order and agreement” that incorporates the GRID standards can get state permits on a rolling basis as soon as they show proof of local approvals. That’s the fast lane.
Those who refuse to sign must submit all their permit applications – every single one – before the state will issue even a single permit. If one document is missing, the entire process resets. The administration argues this makes it essentially impossible to build a large-scale data center without agreeing to the GRID standards.
Deputy Chief of Staff Sam Robinson told a state board earlier this month that the administration respects local zoning decisions, but if a project’s environmental risks are too high, the state will regulate so heavily that it becomes cost-prohibitive. “But there are parts of Pennsylvania where one house sits every square mile,” he said. “In those places, a data center might make sense, and nobody would care.”
The Governor’s Responsible Infrastructure Development (GRID) standards require data center developers to:
Several states have enacted outright moratoriums on data center construction, and a growing number of Pennsylvania lawmakers support such a move. Shapiro’s order does not impose a moratorium, but it dramatically slows the permitting process for projects that don’t meet the GRID standards.
“The administration is effectively creating a regulatory wall that few developers will want to climb,” said a data center industry analyst who asked not to be named. “The question is whether the largest tech companies like Amazon, Microsoft, and Meta will accept these terms or look elsewhere.”
The order also targets speculative development. Shapiro noted that while more than 100 data centers have been proposed across the state, “most of those proposals are completely speculative” and will never be built. By requiring local zoning approvals upfront, the order aims to stop developers from floating projects that lack real backing – a practice that has frightened communities.
Pennsylvania’s data center sales tax exemption exempts qualifying developers from the state’s 6% sales tax on construction and equipment purchases. The tax break has been projected to cost the state over $2 billion in lost revenue by mid-2031. Previously, Shapiro asked the legislature to attach environmental and transparency conditions to the exemption, but lawmakers never acted.
The executive order unilaterally instructs the state Department of Revenue to update program guidelines so that only developers who execute a GRID consent order can apply for the exemption. Existing projects that already have the exemption will keep it, but any new applicant must comply.
The order does not claw back permits or tax exemptions already granted. Shapiro said five data centers have all the permits they need and are free to proceed. However, any project that still needs state permits – even if construction has begun locally – must now follow the GRID track to get them on a rolling basis. Projects that ignore the order will be forced into the difficult one-shot permitting process.
The ban on nondisclosure agreements takes effect immediately for all state agencies under the governor’s control. Existing NDAs remain in place, but agencies cannot sign new ones related to data center projects.
The Data Center Coalition, which represents major operators, declined to comment on the order. But several local officials expressed cautious optimism. “Finally, we have a tool that forces developers to talk to us before they start moving dirt,” said a township supervisor in central Pennsylvania who spoke on condition of anonymity.
Environmental groups, including the Sierra Club Pennsylvania chapter, praised the clean energy requirements but called for a full moratorium until the state adopts a comprehensive energy plan.
The order is likely to face legal challenges. Developers may argue that tying the tax exemption to voluntary GRID standards effectively makes it mandatory, and that the state is overstepping its authority. The Shapiro administration maintains the order is a legal exercise of executive power over state procurement, permitting, and tax administration.
For now, the message is clear: large-scale data centers will not be built in Pennsylvania without a firm commitment to clean energy,
