Pennsylvania is introducing a permitting incentive framework that fast-tracks approvals for data centre loads exceeding 25 MW if they commit to adhering to the state’s infrastructure development standards and bringing their own power.
Under a new permitting framework for electrical loads exceeding 25 megawatts, applicants that commit to complying with the state’s recently introduced infrastructure standards for data centers will receive preferential treatment. Shapiro’s executive order establishes this system amid a broader wave of state and local efforts to set limits on data center expansion. According to a National League of Cities database unveiled Wednesday, at least 81 cities and counties currently enforce moratoria on such development.
The executive order requires developers to sign a consent order and agreement affirming adherence to the infrastructure standards unveiled in February. Those who execute the agreement will have their applications reviewed by the Pennsylvania Department of Environmental Protection (DEP) on a rolling basis. Conversely, developers who decline to sign will face procedural delays; the state will not process their applications until they secure all required local permits, along with necessary water withdrawal and wastewater discharge authorizations.
Industry and advocacy groups have responded with measured caution. Katie Blume, political and legislative director for Conservation Voters of Pennsylvania, told Utility Dive, “We have so much speculation in Pennsylvania — like, gold rush speculation on these data centers.” She added, “A lot of this [order] is going to be weeding out those bad actors because they're not going to want to spend five years in the permitting process.” Meanwhile, Dan Diorio, executive vice president for state policy and government affairs for the Data Center Coalition, cautioned against regulatory instability. In an emailed statement, he said, “It’s important that rules are not changed midstream impacting ongoing investment in verified and responsible data center projects.” He emphasized that “Data centers take compliance and accountability seriously, building only where they are authorized to do so under local, state, and federal rules and regulations.”
The newly mandated infrastructure standards require data centers to cover “all costs caused in whole or in part by the interconnection, service, or load of a [data center] project, including any costs associated with energy and ancillary services, transmission, distribution, network upgrades.” Additionally, facilities must be powered by new generation resources located within the same local PJM Interconnection zone where they operate. Shapiro specified that these facilities must also draw from increasingly larger shares of firm clean energy, including solar, advanced nuclear, and battery storage. The clean energy mandate begins at 10% on January 1, rises to 14.5% three years later, and reaches 32% by January 1, 2035.
To support grid modernization, the executive order directs the DEP to expedite permitting for clean energy and storage projects developed on brownfield sites. It also mandates the agency to facilitate advanced reconductoring and other next-generation transmission technologies on existing rights-of-way. In prepared remarks, Shapiro criticized the rapid pace of recent developments, noting the state has “seen an unacceptable number of speculative proposals ... many of them led by developers who have no regard for local communities.”
Major utilities already hold significant exposure to the sector. According to an August 7 investor presentation, PPL Electric holds approximately 20.7 gigawatts of potential data center load under active service agreements in Pennsylvania. FirstEnergy reported in a July 28 presentation that its Pennsylvania utilities have data center contracts totaling nearly 1 gigawatt. While the direct impact of the executive order on these projects remains unclear, Jefferies analysts warned that a slowdown could ripple through regional infrastructure spending. Exelon, FirstEnergy, and PPL are “materially increasing their transmission investment with data center demand a key driver,” the analysts noted. “If the pace of data center growth slows, we see downside pressure to the pace of transmission investments.” They further observed that data center-driven transmission costs are currently being distributed across residential and other utility ratepayers.
Finally, the executive order instructs the state Office of Transformation and Opportunity to strip all existing data center projects of their eligibility for the PA Permit Fast Track Program, which was established in 2024. It also explicitly prohibits state agencies from entering into confidential agreements with data center developers.