Pa. Data Center Standards Announced by Governor

Requirements for Pennsylvania data center developers seeking state support, faster permitting, and access to tax incentives were recently unveiled by Gov. Josh Shapiro.

The Governor’s Responsible Infrastructure Development (GRID) Standards were initially proposed as part of Shapiro’s 2026-27 budget outline, and the recently released standards provide details of that plan.

The GRID standards establish best practices that data centers must comply with to receive support from state agencies and provide accountability, and require real local community value and protections for state residents from rising energy costs and community and environmental effects.

An increasing number of large, energy-intensive data center projects have recently been announced in Pennsylvania, including the Homer City data center and power plant campus in Indiana County. The state is becoming an attractive site for data centers because of its abundant energy sources, access to water, and available land. While Shapiro has voiced support for responsible economic development from data centers, residents and some lawmakers have raised concerns about rising electric bills, pollution, water use, and community impacts from these large developments.

“That’s why I am putting clear guardrails in place to hold developers accountable to protect consumers, strengthen communities, and put Pennsylvanians first. If companies want the Commonwealth’s full support they must meet strong standards on energy affordability, clean energy generation, transparency, workforce development, community impact, and environmental protection,” Shapiro said in a release. “This is about setting a higher bar for projects and ensuring development happens responsibly and in a way that benefits Pennsylvanians.”

The GRID standards would require developers seeking state support to submit an application for certification to the Office of Transformation and Opportunity and the Department of Revenue addressing how they will meet four standards: energy affordability, transparency and community engagement, workforce and economic development, and environmental protection.

If the application meets those requirements, it will receive certification and be eligible for fast-track state permitting and sales tax exemption for data center equipment. Operating data centers must provide annual third-party documentation and reporting on how they are meeting the requirements.

Among the key areas is energy affordability, as rising electricity demand from data centers has been largely responsible for rapidly increasing electric bills throughout the Mid-Atlantic region served by PJM Interconnection. There are also concerns that new power generation cannot be brought online fast enough to keep up with demand, leading to reliability concerns. Aging grid infrastructure must also be upgraded to keep up, and questions are being raised about how those costs should be allocated.

The GRID standards would require developers to “build, bring, or buy” the incremental electric capacity needed to meet its new energy demands and pay the full cost of that capacity, which must be located within the same PJM delivery area as the proposed project and include an increasing percentage from clean energy sources. Developers must also pay all costs caused by the interconnection, including any grid upgrades.

Community outreach and benefit plans to address issues such as noise, lighting, air quality, and other concerns would also be required, and developers must commit to making at least $250 million in new investment. Environmental protections include limiting energy and water consumption through advanced technology and meeting strict emissions and water monitoring standards.