Key Takeaways
Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05 on Tuesday, requiring AI data center developers to pay the full cost of the electricity infrastructure they need instead of spreading it across ratepayers.
If a local community rejects a project, state environmental regulators will not issue permits for it, and nondisclosure agreements on data center projects are no longer permissible.
More than 100 data centers have been proposed in the state, 58 have engaged with regulators, 15 have applied for at least one permit, and only five are fully permitted for a first phase.
The order directs the Department of Environmental Protection to review a data center permit application only if the developer has made a legally binding commitment to the Governor's Responsible Infrastructure Development requirements, known as GRID, and has already secured local approval. Developers who will not sign that commitment go to the back of the line, with no review until every local approval is in hand and every required permit application has been filed and found compliant.
The core provision is about who pays. Under the GRID requirements published by the governor's office, developers must cover the full cost of new generation, transmission and distribution needed to serve their load, rather than socializing those costs across households and small businesses, which is current practice. Shapiro's energy affordability counsel is also directed to work with the Public Utility Commission on protocols that would cut power to data centers before other customers if the grid is stressed, and that would bill data centers for the reliability auctions PJM runs to secure new plants to meet their demand.
The Buildout Is Outrunning the Rules
The timing is hard to miss. WYDE reported this week that Nvidia is guaranteeing up to $105 billion for a single OpenAI data center campus in Ohio that needs 10 gigawatts of new generation, and that six Wall Street firms have committed $500 billion to finance AI infrastructure using compute as collateral. Almost none of that capital stack has a line item for the grandmother whose bill goes up when a substation gets built.
Pennsylvania is the first state to write that principle into a permitting gate. "Growth should pay for growth," PUC Chairman Steve DeFrank said. Shapiro acted after Senate Republicans declined to move House bills codifying GRID, the Washington Post reported. The administration also published a public map tracking every proposed project through permitting. Worth watching whether other PJM states copy it.
People Also Ask
What does Pennsylvania Executive Order 2026-05 do?
It requires all data center projects seeking state permits to make legally enforceable commitments to the GRID requirements and to obtain local approval first. It also removes data centers from the state's fast-track permitting program.
Who pays for grid upgrades under the new rules?
The developer. Data centers must pay the full cost of new generation, transmission and distribution needed to power the project, including if the facility later closes and cannot pay.
Can a Pennsylvania town block a data center now?
Effectively yes. State regulators will not issue permits to a project that has not received the local approvals it needs, which gives municipalities a decisive say.
How many data centers are proposed in Pennsylvania?
More than 100 projects appear in public databases, 58 have engaged with the Department of Environmental Protection on permitting, 15 have applied for at least one permit, and five have all permits for a first phase.