What changed on August 18
Governor Josh Shapiro signed Executive Order 2026-05 on August 18, 2026. An executive order is generally described as a directive issued by a governor rather than a law enacted by the legislature. This one reaches any AI data center in Pennsylvania whose peak demand is over 25 megawatts, meaning the site would pull more than 25 megawatts of electric power at its busiest moment. A project that size can no longer get its state environmental permits reviewed and issued as they are filed. First the developer must sign a contract with the Department of Environmental Protection, the state agency that issues those permits, promising to meet the state’s GRID Requirements. Executive Order 2026-05
The GRID Requirements are Pennsylvania’s list of conditions covering the power a site uses, the jobs it creates, how open it is with its neighbors, and how it treats the environment. Three things have to happen before the developer files a single new application with DEP. The developer has to name the project and give DEP written notice that it intends to comply with GRID. It has to attend a meeting with DEP that settles which permits the project needs and when the local government approvals were or will be granted. Then it has to sign a Consent Order and Agreement written for that one project, which is a contract between the developer and DEP that the state can enforce in court.
Shapiro described the same three steps at the signing ceremony, ending with a legally binding consent order that locks the developer into GRID and sets penalties for breaking it. Governor’s remarks Because all three come before filing, a developer picks its track before it puts anything in front of the state. Nothing in the order describes a way back for a project that files first and decides later.
The two tracks for a project over 25 megawatts
The Governor’s office says DEP will evaluate a proposed AI data center’s permit applications only if the developer has made a legally binding commitment to meet GRID and has received local approval. Governor’s office ICYMI release
For a developer that signs the contract, DEP works through the applications as they arrive rather than waiting for the complete set. No permit issues until the developer documents that the project is consistent with the local comprehensive plan and that it holds every local approval under the municipality’s zoning rules. A comprehensive plan is a written plan used to guide development. Pennsylvania also runs two permitting timeline programs, PAyback and the Permit Decision Guarantee. For AI data center projects whose developers execute a Consent Order and Agreement, that clock does not start until DEP has the local paperwork in hand. Executive Order 2026-05
A developer that refuses the contract gets less than that. DEP does not begin reviewing its applications at all until the local approvals are documented, along with any permission the project needs to take water and to discharge wastewater. Nothing issues along the way, no permit issues until every application has been received and reviewed, and the project is shut out of both timing programs.
The Governor’s office calls the local approval requirement a change from current practice and says the new review process applies to all new permit applications for these projects going forward. Governor’s office press release Without a GRID commitment, running the township process and the state process side by side no longer buys any schedule. Shapiro said that in Archbald, Lackawanna County, six AI data center campuses made up of 51 giant warehouses have been proposed in a single borough of 7,500 people covering 17 square miles. Governor’s remarks Each of those campuses now has to win in Archbald before Harrisburg will approve it.
What the GRID contract locks in
A developer has to build, bring or buy new electric capacity that matches its project’s ramp up, and pay the full cost of it. That capacity has to come from generation that is new or otherwise additional and is in the same local zone of the PJM grid as the project. GRID Standards PJM is the organization that runs the electric grid across 13 states and the District of Columbia. PJM says new AI data centers planned there make up 94% of new energy demand for the next four years. WHYY At least 10% of the power has to be clean and firm, meaning carbon free and available whenever it is needed. That share starts January 1, 2027, rises to 14.5% on January 1, 2030 and reaches 32% on January 1, 2035. The developer also has to pay every cost its project causes the system, including transmission, distribution and network upgrades, through rates or a surcharge. GRID Standards
The community side carries hard numbers too. It takes at least $250,000,000 of cumulative new investment and at least 200 construction jobs. It also takes 50 jobs each paying at least 125% of Pennsylvania’s average statewide wage by the fourth anniversary of certification. After that, the site must pay at least $1,500,000 a year to the people working there. GRID Standards Under GRID those figures are a benchmark for developers seeking the Commonwealth’s support. Inside a signed consent order with penalties, they are obligations a lender and a tenant both have to price. WHYY A site that reaches its fourth anniversary with fewer than 50 of those jobs falls short of the job commitment in its community benefit plan. The site must show it meets that commitment in annual filings to keep its GRID Certificate.
The old route and the new one
Before the order a developer filed one joint application with two state offices. A qualifying project received a GRID certificate that made it eligible for the state’s fast track permitting program, the sales tax break on AI data center equipment, and preferential tax zone programs. GRID Standards That published GRID page still lists fast track eligibility as a benefit, so a developer reading it today is reading the old bargain.
Pennsylvania state review of large AI data centers before and after Executive Order 2026-05
| What changed | Before | After |
|---|---|---|
| Status of GRID | Voluntary best practices, and compliance earned a GRID Certificate and state benefits | Legally binding through a project-specific DEP Consent Order and Agreement, with penalties for non-compliance |
| Trigger for the requirement | Applied to developers choosing to seek Commonwealth support | Applies to any AI data center with peak demand of over 25 MW |
| Local zoning approval | State permit review proceeded without documented local approval | No permit issues until local comprehensive plan consistency and all local approvals are documented |
| Developers who refuse the Consent Order | Reviewed under ordinary DEP practice | No review starts until local and water authorizations are documented. No rolling issuance. Excluded from expedited timelines. |
| Fast Track permitting | AI data centers eligible, GRID Certificate conferred eligibility | All existing AI data center projects removed and future AI data center projects permanently ineligible |
| Confidentiality and reporting | Non-disclosure agreements concealed end user and power source | NDAs impermissible, public DEP permitting map, annual energy and water reports due from July 2027 |
Can a governor do this without a new law?
The Pennsylvania House passed the GRID standards as a bill on June 24 by a vote of 134 to 68. The state Senate has not voted on it, so the standards themselves are not statute. WVIA
The order is addressed to the governor’s own executive agencies. Agencies under his jurisdiction may not use confidentiality agreements in connection with an AI data center project. DEP has to publish a public map with current permitting information for every proposed AI data center project that DEP or the state revenue department knows about. Executive Order 2026-05 For the local approval condition the order points to a line in the state law governing municipal planning. That line says state agencies must consider, and may rely on, comprehensive plans and zoning ordinances when they review permit applications for infrastructure or facilities. The statute says DEP may rely on the township’s plan. The order tells DEP that it will.
This discussion does not address whether the order requires anyone to build a power plant. A developer that wants state review signs a contract agreeing to bring its own power, and its own signature is what makes that promise enforceable. That is a different legal footing than a statute imposing the duty on everyone. WVIA reported that the order may face legal challenges. WVIA Senate Majority Leader Joe Pittman said the Senate addressed AI data center transparency in the 2026-27 state budget it passed. He said lawmakers are working to position more bills for the fall, including proposals that could let municipalities decide whether to impose local moratoriums. WITF
What this means for a project already in motion
The Governor’s office says DEP became aware of more than 100 AI data center projects reported in publicly sourced databases in the last year. Of those, 58 engaged with DEP about permitting, 15 applied for at least one DEP permit, and only five received every permit needed for their first phase of development. Governor’s office press release State officials have not named those five projects. FOX 29 I found nothing in the order or from the Governor’s office on how the applications already sitting at DEP will be handled.
Shapiro said developers who refuse to comply will have no pathway to the approvals needed to build in Pennsylvania. They will also be disqualified from the sales tax exemption on AI data center equipment, a tax break he noted was put in place two years before he was elected. Governor’s remarks A developer cannot keep the identity of its tenant confidential going forward, because the order bars nondisclosure agreements for AI data center projects.
Dan Diorio of the Data Center Coalition said the industry supported 129,600 jobs in Pennsylvania in 2024. He said it also contributed $19.6 billion in state GDP and generated $1.9 billion in state and local taxes. He cautioned against changing the rules midstream on projects already under way. WHYY For anyone above 25 megawatts, I would open the local zoning file and ask DEP for the meeting in the same week. The contract has to be signed before anything is filed, and the township has to say yes before the state clock runs at all.
Tomorrow’s topic
The Wisconsin PSC rule shielding utility customers from data center debt.