Tech and AI
Pennsylvania makes a signed and enforceable undertaking the price of admission for a data centre permit
By Staff Writer | 21 August 2026
The Governor of Pennsylvania signed Executive Order 2026-05 on 18 August, directing the state environmental department to begin reviewing a data centre permit application only where the developer has entered a legally enforceable agreement to meet a published set of conditions and has already obtained every local approval. Artificial intelligence data centre proposals were removed from the state fast track permitting programme with immediate effect, and non-disclosure agreements on such projects were declared impermissible.
The change is procedural rather than legislative, and that is what gives it force. No new statute has been passed. What has moved is the point at which the conditions bite: they were negotiated alongside a permit application, or after one, and they are now a condition of the application being picked up at all.
What a developer must now sign
A developer must attend a pre-application meeting with the Department of Environmental Protection and execute a Consent Order and Agreement containing a binding commitment to the state's Responsible Infrastructure Development conditions, with penalties attached if the commitment is not honoured. A template agreement was published on the same day. Where a developer declines to sign, the department will not begin reviewing any permit application until every local approval has been secured and every permit application needed to build the scheme has already been reviewed and found compliant.
The conditions run to four heads. The developer pays the full cost of the new generation, transmission, distribution and other infrastructure its load requires, without shifting that cost onto households and other businesses. It engages openly with residents and local government early enough for public comment to influence major design decisions. It hires and trains local workers and enters community benefit agreements. And it meets environmental standards including strict conditions on water conservation. Operators must also report annual energy and water consumption to the department, peak hourly energy demand and maximum day water demand among them.
My message to data center developers is clear: if you can't agree to our strict requirements and get the community where you want to build to say 'yes,' you're not going to have the Commonwealth's support either. These are some of the biggest companies in the world - they can afford to be good neighbors, follow the rules, and do this right.
Josh Shapiro, Governor of Pennsylvania
The numbers behind it
More than 100 projects are reported in publicly sourced databases. Fifty-eight have engaged with the department at some level of formality about permitting. Of those, fifteen have applied for at least one permit, and only five have obtained every permit required for a first phase. The gap between the first figure and the last is the state's stated reason for acting: most of what is being announced is not yet a project in any sense a regulator can test.
The tax route has been closed off in the same movement. The Department of Revenue will rewrite the guidelines for the sales and use tax exemption on data centre equipment so that an applicant who does not meet the conditions does not receive it. An administration energy counsel has been directed to work with the state utility commission on three points: protocols under which data centres lose supply before other customers when the grid is stressed, procedures charging data centres rather than other customers for the reliability auctions run to secure new generation against their demand, and accurate forecasting of their electricity demand.
Why the contracting industry should read it closely
For anyone building these schemes, the commercial gate has moved in front of the design gate. Local approval and a signed undertaking now sit upstream of a permit review, so a contractor pricing early works, or an engineer programming a grid connection, is doing so against a consent position that must already be settled rather than one running in parallel. Programmes written on the assumption that permitting and local consent proceed together will not survive this sequence.
Community benefits, environmental consciousness, and mitigating energy costs are real concerns for our members, and we don't have to choose between creating good-paying construction jobs and ensuring that Pennsylvania consumers are protected in the process.
Rob Bair, President of the Pennsylvania State Building and Construction Trades Council
The ban on non-disclosure agreements cuts across the way these schemes have been assembled. Site assembly, load reservation and offtake talks have tended to run under confidentiality, and a promoter who cannot offer it to a landowner or a municipality is negotiating on different terms.
None of this is confined to one state. The mechanism, which is to move existing conditions to the front of the queue and make them enforceable by agreement rather than by argument, needs no new legislation anywhere it might be copied. That is precisely why it travels.