Executive Order 2026-05, titled "Protecting Pennsylvania Consumers from Data Center Impacts," was signed by Pennsylvania Governor Josh Shapiro on August 18, 2026. It directs Commonwealth agencies to condition environmental permitting for data centers on two things: a legally enforceable commitment to the Governor's Responsible Infrastructure Development (GRID) Requirements, and receipt of all required local approvals. It also removes data center projects from Pennsylvania's fast-track permitting program, ties a sales and use tax exemption to the same requirements, and states that nondisclosure agreements are not permissible for data center projects (Source: pa.gov). Shapiro described the order as placing the "nation's strictest guardrails on AI data centers" (Source: youtube.com).
Status and background
The order was issued after the Pennsylvania Department of Environmental Protection (DEP) recorded a rise in proposed projects. According to the Governor's office, more than 100 data center projects in Pennsylvania appear in publicly sourced databases, 58 have engaged with DEP on permitting at some level of formality, 15 have applied for at least one DEP permit, and five have received all permits required for a first phase of development (Source: pa.gov).
The Governor's office framed the order as executive action taken after the legislature did not act: it states that the Pennsylvania House has advanced legislation to codify the GRID Requirements while Senate Republican leaders have not taken up data center protections, and that the administration will continue to seek statutory standards (Source: pa.gov). Shapiro had met residents in Archbald in May 2026 over multiple data center proposals in the borough. Shapiro said the state had "seen an unacceptable number of speculative proposals," and characterized the pipeline as roughly 100 projects that "are never going to be built" against about five that have received permits. In describing the order he said it requires developers to sign a legally binding commitment to the guidelines he had set out in February 2026, including paying for their own power, hiring locally, maintaining transparency with local governments and meeting water-conservation standards (Source: nbcnews.com).
The GRID Requirements
The order operationalizes a set of standards issued separately as the Governor's Responsible Infrastructure Development Requirements, organized around energy affordability, transparency and community engagement, local workforce and economic development, and environmental protection. Under the Requirements, developers must:
- pay the full cost of new electricity generation, transmission, distribution, and other infrastructure needed to power the project, without shifting costs to Pennsylvania households and businesses;
- conduct open engagement with local residents and officials, including detailed community outreach plans, notification to affected local governments, public meetings, and consultation early enough to allow input on major design decisions;
- hire and train local workers and enter community benefit agreements; and
- meet environmental standards including water conservation requirements.
Permitting mechanism
The order works through DEP's permit review process rather than through a moratorium. Developers who agree to the GRID Requirements must attend a pre-application meeting with DEP and execute a Consent Order and Agreement (COA) containing a binding commitment to the Requirements and penalties for failure to meet them; a template COA was published alongside the order. For those projects DEP continues to review qualifying permits as applications are submitted, but — as a change from prior practice — will not issue any permit until the project has secured all required local approvals.
Developers who do not agree to the GRID Requirements face a sequencing penalty rather than a prohibition: DEP will not begin reviewing their permit applications until after all required local approvals are secured and every permit application needed for construction has been submitted and found compliant.
The order also directs DEP to review its regulations and recommend new ones to the Governor's Secretary of Policy and Planning, and requires data center operators to report to DEP their total annual energy consumption, total annual natural gas consumption, estimated average hourly energy use at peak, total annual water consumption with maximum day demand, and measures taken to protect the public from polluted water or air.
Other provisions
The Department of Revenue is directed to update the Computer Data Center Equipment Exemption Program guidelines so that applicants who do not meet the GRID Requirements do not receive the sales and use tax exemption. All data center proposals are removed from the PA Permit Fast Track Program administered by the Office of Transformation and Opportunity, and will not be considered for it in future. The Department of Community and Economic Development is to publish best practices for municipalities on zoning standards and community benefit agreements. The administration published a public map of proposed data center projects that have engaged with DEP, showing permit status.
On the electricity side, the order directs the Special Counsel for Energy Affordability to engage with the Pennsylvania Public Utility Commission on three items: protocols under which data centers lose electric service before other customers when the grid is stressed; procedures for utilities to charge data centers, rather than other customers, for the costs of the reliability backstop auctions PJM conducts to secure new generation for data center demand; and protocols for accurate forecasting and transparent disclosure of data center electricity demand.
Reactions
DEP Secretary Jessica Shirley said developers "must meet strong, enforceable environmental standards and demonstrate that their projects can move forward responsibly." Special Counsel for Energy Affordability Mark Szybist said that without new PUC rules "data centers could make the electric system less reliable and impose unjust and excessive costs." PUC Chairman Steve DeFrank described the order as reinforcing the principle that "growth should pay for growth." Dawone Robinson of the Natural Resources Defense Council called the order "a strong start for Pennsylvania" while saying "there is more to do." Rob Bair of the Pennsylvania State Building and Construction Trades Council said the GRID principles offer "a path to build here in Pennsylvania" for responsible developers. Dave Sanko of the PA State Association of Township Supervisors framed the order around local land-use authority (Source: pa.gov).
Daniel Castro, president of the Information Technology and Innovation Foundation, said on August 20, 2026 that the order "goes too far," that it will harm "responsible" growth, and that it ignores work AI developers have already done on ratepayer protection and environmental stewardship. Castro also said Shapiro "is right that data center development should be transparent, that companies should engage with communities, and that they should pay the full cost of the electricity"; that quotation is truncated in the retrievable text, of which only the article lede could be read (Source: insideaipolicy.com).
Comparison with other state actions
Pennsylvania's order differs in instrument from New York's Executive Order No. 62 of July 14, 2026, which held discretionary permit applications in abeyance for facilities of 50 megawatts or more pending an environmental impact statement. Executive Order 2026-05 imposes no capacity threshold and no halt; it conditions permits on local approval and on an enforceable commitment, leaving projects that accept the conditions able to proceed. Both are executive actions taken where state legislation had not passed. See Data Center Siting / AI Power Politics and AI Data Centers.
Relationships
- instance-of: Data Center Siting / AI Power Politics
- related: AI Data Centers, AI Infrastructure Capex, Josh Shapiro
- contrasts-with: New York Data-Center Moratorium (2026) — moratorium instrument versus conditional-permitting instrument
- regulated-by: applies to any developer seeking Pennsylvania environmental permits, including projects associated with OpenAI and other hyperscale operators
Open questions
- Whether the General Assembly codifies the GRID Requirements in statute, and whether an executive order conditioning permits on local approval survives challenge under Pennsylvania administrative law.
- How the prohibition on nondisclosure agreements interacts with existing signed agreements between developers and municipalities.
- Whether the PUC adopts the three cost-allocation and curtailment protocols the order directs the Special Counsel to advocate.