Pennsylvania Pulls AI Data Centers From Fast Track, Bans NDAs

Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05 on August 18, 2026, removing AI data center proposals from the state's Fast Track permitting program and banning nondisclosure agreements for data center projects. The order creates the Governor's Responsible Infrastructure Development (GRID) Requirements, and developers must sign a legally binding Consent Order and Agreement before the Department of Environmental Protection (DEP) reviews any permit application.

What does the order actually require?

The GRID Requirements set conditions across five areas: energy affordability, community engagement, workforce and economic development, transparency, and environmental protection. The energy terms are the sharpest.

Developers must secure new generation capacity — labeled "Incremental Capacity" and "Incremental Energy" — sufficient to cover a facility's full peak demand and annual consumption, physically deliverable to the PJM Interconnection zone where the data center sits. They must pay 100 percent of grid upgrade costs their project causes, including transmission, distribution, network upgrades, and dedicated substations.

A clean-energy procurement schedule starts at 10 percent and climbs to 32 percent by 2035, sourced from dispatchable clean firm resources located in Pennsylvania: nuclear, hydro, geothermal, or fossil with carbon capture.

How strict are the environmental terms?

Water use gets annual reporting, with conservation measures including closed-loop cooling where feasible. Backup diesel or gas generators face strict limits and real-time logging requirements. Projects in designated Environmental Justice Areas must implement heightened pollution mitigation and community health safeguards.

DEP will not issue any permit until a developer secures all required local municipal land-use, zoning, and land-development approvals. Developers who sign the Consent Order get rolling permit review; those who refuse face a delayed track where DEP begins review only after every local approval is in hand.

The order also ties the state's Computer Data Center Equipment sales-tax exemption to GRID compliance. It directs the Special Counsel for Energy Affordability to work with the Public Utility Commission on protocols that would shed data-center load first during grid stress and allocate "reliability backstop" auction costs to data centers rather than other ratepayers. A publicly accessible map of all proposed projects that have engaged with DEP will be updated regularly.

Why did Shapiro reverse course?

A year ago, Shapiro celebrated Amazon's $20 billion statewide investment as the largest in Pennsylvania history. "The future of AI is going to run right here through the Commonwealth of Pennsylvania," he told a crowd in Berwick in 2025. His administration built the Fast Track system to accelerate exactly these developments.

By mid-2026, DEP knew of over 100 data center proposals in public databases — 58 projects had engaged DEP at some level, 15 had applied for at least one permit, and five had received all permits needed for a first phase. Local opposition grew around water consumption, electricity costs, secrecy over project ownership, and the small number of permanent jobs data centers create.

In Luzerne County, residents organized against "Project Hazelnut" after right-to-know requests revealed Amazon Web Services as the end user — and after the developer offered $10,000 payments to residents contingent on occupancy permits, a move critics called a bribe.

Shapiro acknowledged the turn in August: "I have put the strictest guardrails in the nation in place to stop these predatory developers and these bad proposals from infecting our Commonwealth." He told NBC the pause "can't be the policy," framing the order as a floor of conditions almost all developers would have to meet for swift state approval.

How does Pennsylvania fit the national picture?

The order landed amid a national backlash. SemiAnalysis noted in September 2026 that midterm candidates in both parties campaigned on stricter conditions — 15 candidates wanted data centers to pay their own grid costs, 11 wanted limits or reporting on water use. Nine of 20 gubernatorial nominees favored pausing new construction; 11 favored conditions. Texas Governor Greg Abbott froze TCEQ permits in September, and Oregon Governor Tina Kotek extended a state-land freeze to air and water permits through July 2027.

Pennsylvania's order preceded the November 2026 midterms, in which Democrats won control of Congress and took governorships in Texas, Ohio, and Georgia on platforms promising moratoriums or conditional pauses. Shapiro, viewed as a potential 2028 presidential candidate, has been described as sounding like a populist while taking "a more moderate path" that recognizes AI's long-term reindustrialization potential.

Industry analysts say hyperscalers — Amazon, Microsoft, Google — can absorb the higher costs and bring their own power. Permitting delays still threaten delivery timelines, because projects can't simply jump to another state without equivalent power, permits, and construction schedules. SemiAnalysis projects 62.2 GW of U.S. net additions in 2028, with 43.5 GW sitting in states holding gubernatorial elections this cycle.

What happens next?

The order covers new permit applications going forward, so it's unclear how many of the 58 projects already engaging DEP will sign the Consent Order versus accept the delayed track. The Department of Revenue will update the Computer Data Center Equipment Exemption Program Guidelines to implement the GRID Requirements, and the PUC's load-shed, cost-allocation, and demand-forecasting protocols remain to be developed. Shapiro is still pressing the General Assembly to codify the GRID Requirements; the House has advanced legislation, but Senate Republican leaders haven't acted.

By Amara Osei