Data Center Order Puts Local Approval Ahead of State Permit Review

Gov. Josh Shapiro's Executive Order 2026-05, signed Aug. 18, requires data center developers to obtain municipal and county land use approval before the Department of Environmental Protection will issue their permits.

The order covers projects with peak demand above 25 megawatts. Because it attaches to the filing rather than to the development itself, projects already holding some DEP permits may find later applications subject to the new process.

Developers who sign a legally binding consent order and agreement committing to the Governor's Responsible Infrastructure Development (GRID) requirements keep a rolling review, though DEP will not issue any permit until the project has secured all required local approvals. Developers who decline face a different sequence: DEP will not begin review until local approvals are in place and every permit application needed for construction has been submitted and found compliant. Attorneys reviewing the order have noted that while it stops short of a moratorium, the delay can produce a similar effect.

The GRID requirements cover energy affordability, community engagement, workforce and economic development, transparency, and environmental protection. On energy, developers must secure their own generation and pay its full cost. Declining also forfeits eligibility for the state sales and use tax exemption on data center equipment. The order additionally removes AI data center proposals from DEP's Fast Track permitting process and prohibits nondisclosure agreements on data center projects.

Pennsylvania has more than 100 proposed data center projects. The Governor's office reports that 15 have applied for at least one DEP permit and five hold all permits needed for a first phase of construction, while a Duane Morris analysis puts the application count at 20. Most proposals remain at earlier stages, where local approval now becomes the first formal decision.

As of Aug. 27, DEP's permit tracker showed a project under review in Washington County, two in Beaver County, and two in Allegheny County, one of which has completed DEP review.

The Department of Community and Economic Development has also published a Pennsylvania Data Center Planning Toolkit for elected officials, municipal staff, and economic development professionals evaluating proposals. It covers zoning and legal considerations, infrastructure and fiscal impacts, and community engagement.

Legal challenges are expected. Attorneys have noted that the order works around both the legislative process, which the Governor acknowledged, and the standard rulemaking process. A subsequent administration could rescind it without legislative action.

Residents can view proposed projects by location, permitting stage, and approval status, and submit feedback to the state on data center development in their communities.