Developers who want the state's support to build data centers in Pennsylvania would have to adhere to new standards — that could eventually be law — proposed by Gov. Josh Shapiro.
They could still build data centers if they don't meet the standards, but developers wouldn't receive the state's support.
"This is about setting a higher bar for projects and ensuring development happens responsibly and in a way that benefits Pennsylvanians," Shapiro said in a press release issued Wednesday.
The refined Governor's Responsible Infrastructure Development (GRID) Standards push developers to be transparent, especially regarding end-users for the facilities, create their own power, provide millions of dollars for the community and the state, and agree to environmental sustainability standards. The governor also wants to change a tax exemption program for data center owners and operators.
Across Pennsylvania developers have plans to construct data center campuses that feature multiple massive facilities, often larger than football fields. Data centers operate 24-hours a day, seven days a week and store the "brains" of artificial intelligence, cloud computing and basically everything that is done online.
Data center campuses are proposed next to schools, homes and parks. And residents in those communities across the state, and especially in Northeast Pennsylvania, are opposed to the industry. There are six data center campuses proposed in Archbald, in Lackawanna County — the most of any municipality in the state.
Amazon also committed $20 billion to build in Pennsylvania.
"I've heard directly from Pennsylvanians who are concerned about the impact data center development could have on their communities, the environment, and their utility bills. That's why I am putting clear guardrails in place to hold developers accountable to protect consumers, strengthen communities, and put Pennsylvanians first," Shapiro said.
Streamlined standards
Shapiro first announced GRID Standards in his February budget address.
If the projects comply, they could receive GRID Certification from the state's Office of Transformation and Opportunity (OTO) and the Department of Revenue (DOR). If certified, the OTO will post detailed information about each project on its website. The projects will also be available for PA Permit Fast Track Program, which streamlines permitting for high-impact economic development and infrastructure projects.
Shapiro's administration is also working with the general assembly to introduce accompanying legislation to codify GRID Standards into law.
"As Pennsylvania continues to compete for major economic development projects and lead on innovation, we have a responsibility to set strict accountability standards and ensure these projects create real opportunity for our communities," Shapiro said.
The state says the standards were developed with input from local leaders, organized labor, industry, and environmental stakeholders.
According to the state, GRID standards focus on four key areas:
● Protecting Energy Affordability: Project developers must provide a plan detailing how they will provide for the data center's energy needs without imposing costs on Pennsylvanians and other utility ratepayers. Developers must agree to build, bring online, or buy incremental electric capacity needed to meet new energy demand while paying the full cost of the capacity. That capacity must generally come from resources located within the same deliverability area as the proposed GRID project and must also include increasing percentages of energy coming from dispatchable clean firm energy resources located within the Commonwealth, up to 32% in 2035. Developers must also pay all costs associated with interconnection, transmission, distribution, network upgrades, ancillary services, or dedicated facilities caused in whole or in part by the project's electricity demand.
● Promoting Transparency and Community Engagement: Developers must provide the state with a community outreach plan that promotes public engagement and transparency, including commitments to notify impacted local governments, hold public meetings, and consult with municipal leaders at a sufficiently early stage of the project. Developers must also provide information on the end user(s) for the data center and a footprint report detailing the project's planned building size, campus acreage, estimated peak electric demand, estimated annual water consumption and water source, percentage of electricity sourced from non-emitting resources, and expected Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE).
● Supporting Workforce and Economic Development: Developers must provide the state with a community benefit plan detailing anticipated contributions to the state and local community beyond existing legal obligations. To qualify for GRID certification, developers must commit to making at least $250 million in cumulative new investment, creating at least 200 prevailing wage construction jobs, at least 50 jobs paying at least 125% of Pennsylvania's average statewide wage by the fourth anniversary of certification, and then paying at least $1.5 million to employees at the project site after the fourth anniversary. Developers must also submit hiring and workforce training plans that encourage local workforce participation, including the use of registered apprenticeship programs and skilled construction labor, and enter into community benefit agreements addressing issues such as traffic studies, noise and lighting mitigation, air quality requirements, emergency management coordination, aesthetic concerns, and financial contributions toward local priorities.
● Strengthening Environmental Protection: Developers must provide DOR and OTO with a sustainability plan detailing how they will deploy advanced technology to limit water and energy consumption by the data center through certifications. Developers must also commit to minimizing local air pollutants by using zero-emission energy storage systems where possible or backup generators meeting strict emissions standards and operational practices that materially reduce emissions. For projects located within the watershed of a "High Quality/Exceptional Value Water" or within areas identified as "Pennsylvania Climate Change Connectivity," developers must also commit to supporting the monitoring and mitigation of impacts to land, water, and biological resources beyond existing regulatory and permitting requirements.
Tax exemptions
Act 25 of 2021 currently allows data center developers, who are certified through DOR, to qualify for a sales and use tax exemption for the Computer Data Center Equipment Exemption Program. The exemption from the state's sales tax is when computer data center equipment is sold to, used, or consumed in a certified data center by an owner, operator, or qualified tenant.
"If left unchanged, the current sales and use tax exemption is projected to cost the commonwealth more than $517 million annually by FY 2030-31," the state says.
Shapiro's administration is now calling on the general assembly to amend that tax benefit.
"Once this legislation is signed into law, developers will be required to secure GRID certification in order to be eligible for tax benefits for the purchase of computer data center equipment," the state says.
The revenue would have to be used to invest in key public priorities, including education, environmental protections, upgrading infrastructure, supporting public safety and expanding workforce development, according to the state.
Copyright 2026 WVIA