Pennsylvania spent the last two years courting data center developers. This week, Governor Josh Shapiro reversed course in public, signing an executive order that strips data centers of the fast-track permitting access they’d relied on and replaces it with some of the strictest state-level requirements in the country.
The order also removes data center projects from Pennsylvania’s Permit Fast Track Program entirely, a process established in 2024 that Shapiro himself had used to attract major projects like Eli Lilly’s Lehigh Valley investment, GRID compliance doesn’t restore fast-track eligibility, it only changes how DEP handles standard permitting. Developers also must sign community-benefit agreements covering local hiring, training, and investment in local infrastructure or schools, meet new transparency requirements, and comply with a ban on non-disclosure agreements between developers and state agencies, something Shapiro said had let developers withhold basic information from the very communities hosting these projects. Companies that don’t comply with GRID also lose access to Pennsylvania’s existing sales and use tax exemption for data center equipment.
The GRID standards themselves aren’t new, the administration proposed them in May, but they were voluntary until this order made them a legal precondition for the state’s most favorable permitting path. The order actually creates two distinct tracks for any project over 25 megawatts. Developers who commit to GRID, by notifying DEP, attending a pre-application meeting, and signing a project-specific consent order, get rolling permit review, meaning DEP can approve qualifying permits incrementally rather than waiting for a complete application package. Developers who decline GRID face a slower path by design: DEP won’t begin reviewing anything until the developer has already secured local land-use approval and any required water permits, and even then, permits only get issued once every application has been submitted and reviewed as a whole, with no rolling approval and no access to the state’s Payback and Permit Decision Guarantee programs.
The energy requirement is the most consequential piece of GRID for developers. Projects must add or procure new electric capacity sufficient to cover their own demand, generally from the same regional power market area, while paying the full cost of that capacity themselves rather than passing it to ratepayers. That incremental supply has to get cleaner over time, reaching 32% clean firm energy by 2035. Data centers connected to the regular grid also face a new curtailment rule: during specified system emergencies, they’ll generally be cut off before other customers, unless they’ve separately secured incremental capacity covering their entire demand. Notably, even data centers built with their own dedicated, behind-the-meter power generation aren’t exempt, the order applies based on a project’s peak demand regardless of where its electricity comes from, so any project over 25 megawatts faces the same GRID choice either way.
Shapiro framed the reversal as a direct response to public pressure. “I’ve listened to the good people of Pennsylvania as I’ve traveled our commonwealth, and I’m here to say today that we will not be bullied by these developers,” he said at the signing. He pointed to Archbald, a small Lackawanna County borough facing proposals for six separate data center campuses, as an example of the scale of concern he’s been hearing directly from residents. He also downplayed how much active development the order would actually disrupt: of more than 100 data center proposals currently circulating in Pennsylvania, Shapiro said only five projects hold all the permits needed to begin operating, and no AI data centers are currently running in the state at all. “Most of those proposals are completely speculative, and many of them haven’t even taken the formal steps to apply to the Commonwealth, and they’ll never be built,” he said.
The order landed to a mixed but largely favorable reaction from local and environmental groups. Molly Parzen, executive director of Conservation Voters of Pennsylvania, praised Shapiro for listening to “the environmental community, local elected officials and community advocates.” Dave Sanko, executive director of the Pennsylvania State Association of Township Supervisors, said that after watching eight governors “talk the talk” on cooperating with local governments, Shapiro was the first to actually follow through. Not everyone was satisfied, though. Megan McDonough, Pennsylvania state director of Food & Water Watch, argued the order doesn’t go far enough, calling it “his attempt to save face” after what she described as previously rolling out the red carpet for the industry, and said that if these projects pose enough risk to require special rules, the state shouldn’t be managing that risk while continuing to permit the industry at all.
The politics behind the timing aren’t subtle. Shapiro is running for reelection this year against Republican Stacy Garrity, who has called for an outright pause on data center development, and he’s widely discussed as a potential 2028 presidential candidate. His order arrives alongside similar moves in other states, including New Jersey, where Governor Mikie Sherrill unveiled her own data center guardrails in May after declaring a state of emergency over utility costs. For Pennsylvania developers who spent the last two years building projects around the promise of fast-tracked approval, the message from Harrisburg this week was unambiguous: that promise is gone, and getting a permit now runs through the communities these projects are built next to, not around them.