The Pennsylvania state House has approved two bills related to hyperscale data center construction. The votes this week are the latest moves by Harrisburg lawmakers to regulate a fast-growing industry that some communities and environmental groups have opposed.
One bill would produce a so-called model ordinance that municipalities could adopt with state-drafted recommendations on concerns such as building height and size for cloud-computing and artificial-intelligence campuses. Another would require centers to report yearly water and electricity use — and estimate future use — to help address concerns about consumption. Facilities that fail to submit such a report would face a $10,000-per-day penalty.
In the absence of such regulation, the development of data centers "is not some well thought out zoning, planning, and economic development process, this is a reckless gold rush and people are angry, overwhelmed, and they are watching," said Northeastern Pennsylvania Democrat Kyle Mullins in a floor speech to colleagues.
Mullins, a sponsor of both bills, said there are at least nine data center proposals in his Lackawanna County district — with six alone in one borough. He said it's clear those communities need help setting guidelines. (As of last week, there's now a tenth proposal in his district, according to WVIA.)
The votes came on Monday, and the Democratic-controlled House has now passed at least three bills on data center regulation, including one to protect utility customers from price hikes driven by the energy demand from the facilities.
The measures passed this week await consideration in the Senate committee on Environmental Resources and Energy. Their prospects are murky in the upper chamber, which is controlled by Republicans.
Republican House leader Jesse Topper has voted "no" on all three bills. On Monday, he said data centers remain one of the most important topics the legislature will debate all year. But Topper warned that guidelines could drive away investment, and said guidelines should be set by local leaders, not by a one-size-fits-all approach from the state. (Bill supporters stress that municipalities would not be required to adopt the model ordinance, which is meant to serve as a template.)
" We are talking about industry that will bring jobs to this commonwealth and in fact, that under the right guidelines will actually help to … bring energy to this commonwealth," Topper said in a speech.
State Rep. Jamie Walsh (R-Luzerne), who is fighting several data center proposals in his district, said he opposed the bill on zoning standards, because he believes the state's guidelines will actually speed up the construction of data center projects. But Mullins said that by and large, the data center industry opposes the legislation — and environmental groups support it.
"A vote in opposition to it is voting exactly how the data centers want us to vote," Mullins added.
Energy and water reporting is opposed by the data center industry, which says other sectors — such as the manufacturing and food and beverage industries — also consume plenty of resources, but aren't being singled out.
Some data center warehouses use advanced cooling technology to keep their servers from overheating, said Dan Diorio, vice president of state policy at the Data Center Coalition. The group represents developers such as Amazon and Google, and Diorio said many companies recycle the water they use as coolant. Some of those operations, Diorio said, use less water than a country club.
" And yet we're gonna return significantly more tax revenue back to a community than a golf course," Diorio told WESA earlier this year.
Measurements of water consumption can vary. While the coalition cited recent research to back its claim, another, albeit older, study says medium-sized warehouses that don't use advanced tech can consume up to 18 times more water than golf courses
All Democrats voted in favor of both bills, which garnered some Republican support too, including "yes" votes from: Andrew Kuzma, of Elizabeth Township; Jeremy Shaffer, of Pine Township; and Eric Davanzo of Westmoreland County. In total, 32 Republicans voted with all Democrats on the annual energy and water reporting requirements, with 23 GOP members approving the so-called model ordinance.
Kuzma said data center development is necessary. "But we as legislators need to ensure that data centers do not negatively impact the residents of our commonwealth by disturbing neighborhoods or raising energy prices," Kuzma said in a message Tuesday. "It is essential that their placement must be left in the hands of local governments."
Davanzo said he believes the measures would help grow the industry responsibly with "a commonsense approach" that includes trade groups.
"Right now, there are no consistent statewide consumer or safety protections for the information storage industry, and that's a gap that needs to be addressed … without overregulating or discouraging investment and job creation here in Pennsylvania," Davanzo, of Smithton, said in a statement. "In many of the communities I represent, there are no zoning ordinances or municipal codes currently in place."
In addition to the bills passed by the House this week, several others have been floated in Harrisburg — but have yet to advance out of committee.
Washington County state Sen. Camera Bartolotta is the prime sponsor of a measure to fast-track permitting for data centers if companies agree to meet or exceed federal environmental standards.
And another bill in the House, co-sponsored by Pittsburgh Democrat Dan Deasy, seeks to repeal a sales tax exemption for equipment used in data centers by the likes of Meta, Amazon and Microsoft. Opponents of the exemption say the state is losing out on billions of dollars in revenue, while the industry says it's a necessary incentive to develop data campuses.
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