Pennsylvania Governor has signed an executive order mandating GRID compliance as a prerequisite for data center tax incentives and expedited permitting approvals.

Pennsylvania Governor Josh Shapiro has signed Executive Order 2026-05, converting the state’s voluntary GRID Requirements into binding conditions for data center developers. The order ties compliance with the Governor’s Responsible Infrastructure Development framework to both streamlined permitting access and valuable tax incentives statewide.

Pennsylvania now joins New York, Louisiana, Nebraska, and Texas in a growing wave of gubernatorial action reshaping how data center projects are approved and incentivized. Under the new directive, all data center projects have been removed from the PA Permit Fast Track Program. Going forward, only GRID-certified projects will be eligible to participate.

Data center projects with an anticipated peak electrical demand of 25 MW or more must now execute a template Consent Order and Agreement with the Pennsylvania Department of Environmental Protection. Developers who decline to comply with the GRID Requirements face significant permitting delays and will lose access to the state’s fast-track approval process.

The executive order also directs the Pennsylvania Department of Revenue to condition the Computer Data Center Equipment sales and use tax exemption on GRID compliance. Developers who refuse certification risk forfeiting this tax benefit entirely, a consequence that extends to tenants who had expected to share in the exemption.

For developers willing to engage with the GRID framework, the order establishes a clear pathway encompassing Fast Track program participation, tax incentives, and eligibility for certain economic development zone programs. However, the directive raises immediate questions for projects already in the pipeline, including those with pending permit applications, facilities nearing completion, and operational sites.

Law firm Ballard Spahr, whose attorneys Chantelle McClamb and Christopher A. Jones analyzed the order, noted that agency implementation remains underway and advised developers to act quickly to assess their positions. The firm stated it can assist developers in determining how the Fast Track removal impacts active or planned projects, as well as evaluating how in-progress and substantially completed facilities may be affected.

With substantial tax benefits and permitting timelines at stake, developers across Pennsylvania’s data center sector face mounting pressure to align their investment assumptions with the new compliance requirements established under Executive Order 2026-05.