Pennsylvania regulators are linking data center permit approvals directly to compliance with newly updated grid reliability standards.

On August 18, Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05, making the state’s Responsible Infrastructure Development standards a legally binding condition of state data center permitting and adding the Commonwealth to a growing list of jurisdictions rewriting the rules for large-load development. The order directs the Department of Environmental Protection (DEP) to withhold permits from data center projects with peak demand above 25 MW unless developers sign a binding Consent Order and Agreement committing to the administration’s GRID Requirements. Developers who sign receive rolling permit review, contingent upon documentation that all required local zoning and municipal approvals have been secured. Those who decline face a slower pathway: the DEP will not initiate permit review until local approvals and any necessary water permits are already in place, and will not issue permits piecemeal, requiring instead that every application tied to the project be fully reviewed. The GRID framework, initially announced in February and expanded in May, is built on four pillars: energy affordability, transparency and community engagement, local workforce development, and environmental protection.

The order’s core financial mandate requires data centers to cover the full cost of new generation, transmission, and distribution infrastructure their projects necessitate, prohibiting the shift of these expenses onto other ratepayers. The administration cites PJM Interconnection’s own projections to justify the policy: PJM’s 2025 Load Forecast anticipates 74 GW of summer peak load growth across its territory through 2045, primarily driven by data centers. Furthermore, across PJM’s last four base residual capacity auctions, data centers accounted for $29.4 billion, or 46%, of total capacity charges billed to ratepayers, according to PJM’s Independent Market Monitor. Separately, Pennsylvania’s Special Counsel for Energy Affordability is directed to urge the Public Utility Commission to adopt rules that prioritize curtailing data center load during grid emergencies, prohibit utilities from classifying data centers as critical-load exemptions from curtailment, and assign PJM reliability-backstop auction costs directly to the data centers that trigger them rather than distributing those costs across other customers.

Effective immediately, the DEP is removing all data center projects from Pennsylvania’s Permit Fast Track Program and rendering future data center projects permanently ineligible. State agencies are also barred from executing nondisclosure agreements with data center developers, and the DEP must publish a public map tracking the permitting status of every proposed project. Beginning July 1, 2027, and annually thereafter, operating data centers must submit detailed energy and water consumption reports to the state, including peak hourly demand, total water usage by source, and any on-site generation. GRID compliance will also become a prerequisite for Pennsylvania’s sales-tax exemption on data center equipment. As of the order’s effective date, the DEP had received permit applications linked to 20 of the more than 100 proposed projects statewide, with only 14 locations currently holding active exemption certificates.

Pennsylvania’s regulatory shift mirrors a broader trend across PJM-territory and high-growth states; notably, New York suspended new data center permitting in July pending its own environmental review and community-benefit framework. The order also extends the administration’s existing engagement with PJM’s capacity market. Following a 2025 legal challenge that contributed to negotiating a lower capacity price cap, the state reports having saved consumers more than $30 billion to date—a dispute that unfolded amid wider federal scrutiny over whether PJM’s governance structures can adequately accommodate rapid load growth. For developers, the operational reality is straightforward: securing a Pennsylvania data center permit now hinges on obtaining local approval and establishing a binding cost commitment before state-level review can commence.