PENNSYLVANIA — Under the new rules, developers must secure required local municipal approvals before the Department of Environmental Protection issues permits. The order also prohibits data center developers from using nondisclosure agreements. Data center projects that fail to satisfy the GRID requirements will not qualify for the state’s sales and use tax exemption on eligible equipment.

Developers must make legally enforceable commitments to pay for the energy infrastructure needed to operate their facilities without shifting expenses to Pennsylvania households and businesses. They must also report their energy and water consumption and comply with water-conservation standards. As part of the GRID requirements, developers must hire and train local workers.

Shapiro stated that he did not want developers running roughshod across communities. "We've seen too many developers who are trying to bulldoze our community with these speculative deals that are never going to come into reality, and they're wreaking havoc on our neighbors," he said. He noted that serious proposals enjoying local support and protecting the environment would still be considered for engagement.

Fifty-eight data center projects have communicated with the Pennsylvania Department of Environmental Protection about permitting. Five data center projects have received the permits needed for their first phases of development in Pennsylvania. Epic Games founder and CEO Tim Sweeney criticized the executive order as sabotaging American progress and suggested repurposing rusted steel mills for computing infrastructure.

Republican gubernatorial candidate Stacy Garrity stated that Shapiro received more than $5 million in campaign donations from out-of-state data center interests. This political context arises as other states also address data center growth. New Jersey Gov. Mikie Sherrill unveiled a four-part plan in May to place guardrails on data centers. Texas Gov. Greg Abbott ordered regulators to hold up data center projects until they complete work to ensure Texans are not paying higher electricity bills.

Arizona Gov. Katie Hobbs secured a three-year moratorium on the state’s sales tax exemption for data centers. New York Gov. Kathy Hochul ordered a one-year ban on large data centers in July 2026. Illinois Gov. JB Pritzker halted new sales tax exemptions for data centers until lawmakers impose tougher standards on their operations. Ohio gubernatorial nominees Dr. Amy Acton and Vivek Ramaswamy each unveiled policies calling for developers to meet tougher standards before data centers are built.

Why It Matters

The executive order establishes a framework requiring developers to bear the costs of energy infrastructure rather than passing them to households and businesses. By removing data centers from fast-track permitting and mandating local approval, the state shifts decision-making power to municipalities. The GRID standards include enforceable commitments on hiring, training, and environmental reporting.

This action places Pennsylvania among several states implementing restrictions on data center development in 2026. The order affects dozens of projects currently in communication with state regulators. The creation of a public map allows residents to track the status of permits as they are reviewed by the Department of Environmental Protection.

Timeline

On Aug. 18, 2025, Josh Shapiro helped secure a $20 billion investment from Amazon for two data centers in Pennsylvania last year. On December 24, 2025, the Environmental Protection Agency proposed to grant a Clean Air Act petition submitted by the state of New Hampshire. On July 18, 2026, New York Gov. Kathy Hochul ordered a one-year ban on large data centers.

On Aug. 18, 2026, the executive order directed the Pennsylvania Department of Environmental Protection to incorporate the Governor’s Responsible Infrastructure Development (GRID) Standards into its review of new data center proposals. Also on Aug. 18, 2026, Pennsylvania Gov. Shapiro signed Executive Order 2026-05 on Tuesday, Aug. 18, establishing stricter requirements for proposed data centers in the state. On that same date, Shapiro stated, "[I]’ve heard loud and clear from the good people of Pennsylvania as I’ve traveled our commonwealth, and I’m here to say today that we will not be bullied by these developers."

What's New

Additional reporting confirms the executive order directs the Pennsylvania Department of Environmental Protection to incorporate the Governor’s Responsible Infrastructure Development (GRID) Standards into its review of new data center proposals. He stated, "[I]’ve heard loud and clear from the good people of Pennsylvania as I’ve traveled our commonwealth, and I’m here to say today that we will not be bullied by these developers." He also said, "My message to data center developers is clear: If you can't agree to our strict standards and get the community where you want to build to say 'yes,' you’re not going to have the Commonwealth’s support either."

Shapiro said regarding a proposed data center in Montgomery County that he was strongly opposed to the project. Developers must participate in a pre-application meeting with DEP and execute a Consent Order and Agreement (COA) that contains a binding commitment to follow the Governor’s GRID Requirements, and penalties for failure to follow through on those commitments. A template COA containing the Requirements is available.

Shapiro said, "We have a long history in Pennsylvania of industry running roughshod over our communities to make a buck — that stops with me." The executive order removes all data center proposals from Pennsylvania’s fast-track permitting program. He added, "We will not be bulldozed by the lawyers working for these big tech companies. That will not happen in the commonwealth."

How Sources Differ

Sources differ on details regarding Shapiro and proposed data centers. The Pennsylvania Governor's Office press release states that the Shapiro administration created a publicly accessible map identifying proposed data centers that have contacted the Department of Environmental Protection.

Sources differ on details regarding the gubernatorial campaign and data centers. Wisconsin primary election results state that Wisconsin Democratic gubernatorial nominee David Crowley defeated challenger Francesca Hong, who made a call for a one-year moratorium on data center construction a centerpiece of her campaign.