AI data centre regulation in Pennsylvania now begins with a signature. Before the state will so much as open a developer’s permit file, that developer has to sign a contract accepting a fixed set of conditions and the penalties for breaking them, and persuade the town that has to live with the building to say yes.
Governor Josh Shapiro signed Executive Order 2026-05 in the US state’s capital, Harrisburg, on Tuesday. It directs the Department of Environmental Protection to review permit applications from proposed data centres only where the developer has committed to the Governor’s Responsible Infrastructure Development (GRID) Requirements through a Consent Order and Agreement, and has already secured local approval. It took effect immediately and covers all new applications. The template agreement was published the same day.
No new law was needed. The order works through permitting authority the state already holds, which is why the rest of the industry should read it closely.
Developers who refuse to sign are not banned. DEP simply will not open their file until every local approval is secured and every construction permit has already been reviewed and cleared, which inverts the sequence the sector plans around. The Department of Revenue is applying the same test to the state’s sales and use tax exemption for data centre equipment, and every data centre proposal has been removed from Pennsylvania’s permit fast-track programme, permanently.
Under GRID, developers pay the full cost of the generation, transmission and distribution of their project needs rather than passing it to households and businesses. They must consult communities early enough to shape design decisions, hire and train locally, enter community benefit agreements, and meet water conservation standards.
The secrecy clause is the part worth exporting
One line in the order carries further than the rest. The use of nondisclosure agreements on data centre projects is no longer permissible for Commonwealth agencies.
NDAs are the standard instrument in data centre siting worldwide. They are why residents in most host markets cannot find out a facility’s load, its water draw, or which hyperscaler is actually behind the shell company. Pennsylvania has decided that the secrecy is not a side effect of the deal but part of what went wrong with it.
Two disclosure duties sit alongside. Operators must report annual energy and natural gas consumption, estimated average hourly use at peak, total water consumption and maximum day demand, plus any measures taken to protect the public from polluted air or water. The administration has also published a live map of every proposed project that has engaged with DEP, letting residents track each permit through review.
Figures released with the order show why officials wanted the sorting done in public: more than 100 projects appear in public databases, 58 have approached DEP, 15 have applied for a permit, and five hold everything needed for a first phase.
Data centres lose power before households do
The order also sends the state’s Special Counsel for Energy Affordability to the Public Utility Commission with three asks. Utilities should recover the cost of PJM’s reliability backstop auctions from data centres rather than other customers. Data centre demand should be forecast accurately and disclosed. And when the grid comes under strain, data centres should lose electric service before anyone else.
Curtailment ranking is the provision AI infrastructure planners will read twice, because it turns an argument about cost into a constraint on uptime. PUC chairman Steve DeFrank framed the principle simply: “growth should pay for growth.”
Shapiro has travelled a long way to get here. He championed a US$20 billion Amazon commitment to sites in Bucks and Luzerne counties, and told developers this week that the world’s largest companies “can afford to be good neighbours, follow the rules, and do this right.” He faces re-election in November.
The House passed bipartisan legislation codifying GRID; Senate Republicans declined to move it, and majority leader Joe Pittman said the governor’s remarks looked “aimed at erasing his remarks from last year.” Food & Water Watch, campaigning from the opposite direction, called the order “too little, too late,” pointing to the sales tax incentive that survives it.
Why AI data centre regulation elsewhere now looks different
Twenty-seven states in the US have been weighing large-load legislation, and California, Ohio and Utah have already enacted laws that go beyond the voluntary Ratepayer Protection Pledge developers signed at the White House in March, which carries no enforcement. New Jersey’s Data Centre Fair Share Act requires facilities above 50 MW to commit to at least 85% of projected power costs for a decade.
Virginia added an energy consumption tax of $0.011 per kWh. Around 48 projects representing $156 billion in potential investment were blocked or stalled by local opposition in 2025.
What makes Pennsylvania different is that it needed none of those instruments. No statute, no moratorium, no tax overhaul. A governor used existing permitting powers, attached penalties through a contract the developer signs voluntarily, and made the operating data public. Any administration facing the same constituent pressure can lift it, and the consent order template is already online.
The variable to price into AI capacity is no longer land, power or queue position. It is consent, and what a developer has to disclose to earn it.
(Photo by Donnie Rosie)
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