Gov. Shapiro Signs Data Center Executive Order, But Critics Say It Falls Short

By Whitney Downard | Pennsylvania Capital-Star

Using fiery language and describing the companies “recklessly” pushing data centers as “greedy” and “predatory,” Gov. Josh Shapiro distanced himself from project developers after months of mounting pressure to take action. 

“Starting today, (artificial intelligence) data center developers who want to do business in our commonwealth must respect our communities and abide by these stringent requirements,” Shapiro said. “And if they can’t agree to do that, well, they should stop considering Pennsylvania a home for their project.”

The first-term governor is up for reelection this year. Both his opponent — Republican state Treasurer Stacey Garrity — and grassroots campaigns have criticized him for not limiting data centers, which provide the computing power behind e-commerce websites, streaming service and more.

Shapiro’s executive order signed Tuesday would be “legally binding” under his authority as governor, he told reporters, and directs developers to comply with previously proposed standards that were introduced as voluntary.

Secretary of the state Department of Environmental Protection Jessica Shirley clarified that developers who don’t follow the standards won’t get their permit applications reviewed by the agency until local land use approval are obtained, slowing their progress.

Among the conditions: providing their own power sources, with an increasing portion coming from renewable energy sources like solar, advanced nuclear or battery storage; local hiring processes with a “robust” community benefits agreement; public transparency; and compliance with clean air and pure water standards.

“I’m here to say today that we will not be bullied by these developers. We will not be bulldozed by the lawyers for these big tech companies,” he said. “We have a long history in Pennsylvania of industry running roughshod over our communities to make a buck. That stops with me.” 

He repeatedly called Tuesday’s action “the strictest guardrails in the nation,” though it fell short of a moratorium, such as the one advanced last month in New York and didn’t reverse state tax incentives.

In a statement, Garrity’s campaign likened his action to “gaslighting,” saying Shapiro “was the biggest data center cheerleader in the nation” and had received campaign donations from the industry.

“Now that public opinion has turned against him and his donors, Josh Shapiro is playing CYA, and Pennsylvania voters aren’t buying it,” she continued. “Josh Shapiro lit the fuse on the chaos we are seeing in community-after-community across the commonwealth because he was more concerned with his political ambitions than fighting for Pennsylvania communities.”

How we got here

The two parties have accused the other of flip-flopping on data centers after both Shapiro and Garrity welcomed the state’s largest single investment from Amazon to develop a pair of data centers in Luzerne County one year ago.

Shapiro said the landscape had changed since that announcement. 

“Last summer, I announced two projects that will bring thousands of new jobs and over $20 billion of investment to Pennsylvania,” said Shapiro. “Since then, we have seen an unacceptable number of speculative projects for data center development that is swamping our commonwealth — many of them led by developers who have no regard for local communities.” 

He asserted that “no AI data centers (are) up and running right now” in Pennsylvania, adding that just five projects have the necessary permits to begin operations. According to the executive order, the state Department of Environmental Protection has received 20 permit applications related to projects and just 14 sites statewide obtained a tax exemption.

Earlier this year, Shapiro pushed his Governor’s Responsible Infrastructure Development (GRID) Standards, a set of voluntary standards for developers tied to tax benefits and expedited permitting. House members advanced his proposal through the chamber on a bipartisan vote but the Republican-led Senate opted not to move forward with the plan.

Senate Majority Leader Joe Pittman (R-Indiana) pointed to Senate efforts to eliminate a sales tax exemption used by projects, which he said was amended “into something unrecognizable” in the House. He said additional work was underway for more legislation in the fall.

“We strongly believe communities need to have the ability to weigh in on what is best for their residents and are open to further discussions, including considering measures to allow for moratorium decisions to be made at the local level,” he continued. “As our world continues to embrace greater access to technological advancements, the issues of energy development and national security also go hand in hand.”

Some politicians have warned that the United States needs to pursue data center development in order to compete on the global stage. 

Under GRID, which critics panned for being optional, projects would need to increasingly rely on clean energy, make critical economic development investments, work with local governments, hold public meetings and hire local labor at higher-than-average wages.

In exchange, the sites would qualify for the state’s fast tracked permitting process, an option no longer available under the new executive order. 

“While fast track permitting has proven to be (an) incredible asset to helping us plan major economic development projects … what’s become clear to me is that it is not right for these kinds of data center developments,” Shapiro said. 

Dan Diorio, the executive vice president of State Policy & Government Affairs for the Data Center Coalition, advocates on behalf of such projects in the commonwealth. In a statement, he warned about changing rules “midstream” in a way that might impact “ongoing investment in verified and responsible data center projects.” 

“Companies have made plans, communities have prepared for economic opportunities, and workers are ready to build the next generation of digital infrastructure right here in Pennsylvania,” he continued. “Clear, predictable, and workable standards can help provide communities with confidence while allowing Pennsylvania to compete for billions of dollars in investment, create jobs, and strengthen local economies. One-size-fits-all policies that stifle investment and job creation are not the path forward.”

In 2024, the industry contributed $19.6 billion to the state’s GDP, he said, and paid $1.9 billion in state and local taxes.

Mixed support

Shapiro’s order was announced alongside representatives from the Pennsylvania State Association of Township Supervisors, the state Public Utility Commission and the Pennsylvania Utility Law Project, which focuses on affordability and consumer protection.

Democratic leaders from both legislative chambers shared supportive statements and squarely blamed Senate Republicans for not taking up the voluntary GRID standards.

“I am pleased that Gov. Shapiro is taking executive action to hold data center developers accountable for the impacts they have on Pennsylvania’s communities. Senate Republicans have abdicated their responsibility to protect ratepayers, deliver local control, safeguard the environment, or listen to Pennsylvanians of every county demanding the legislature’s attention,” Senate Minority Leader Jay Costa (D-Allegheny) said. 

But not everyone agreed. Food and Water Watch called it “too little, too late,” in a statement, noting that the commonwealth could lose more than $2 billion in revenue by mid-2031 due to the sales tax incentive.

“Shapiro is feeling our heat because Pennsylvanians have made it impossible for him to ignore us. After rolling out the red carpet for this industry, he is now scrambling. But these measures do very little to protect the people who will be left living with the consequences,” said Megan McDonough, the Pennsylvania State Director of the group. 

Tuesday’s action doesn’t “erase” his record, she continued, characterizing it as “his attempt to save face.”

“If Governor Shapiro actually believes these projects pose enough risk to require special rules, then he should stop pretending the answer is to manage the damage while continuing to permit this destructive industry,” she continued. “The only solution to addressing AI data center’s many woes is by placing a mandatory moratorium on all new data center development.”

Pennsylvania Capital-Star is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Pennsylvania Capital-Star maintains editorial independence. Contact Editor Tim Lambert for questions: info@penncapital-star.com.