The data center political war claimed another casualty yesterday at the stroke of Pennsylvania Governor Josh Shapiro’s pen.
The potential 2028 presidential candidate signed Executive Order 2026-05 under the title “Protecting Pennsylvania Consumers from Data Center Impacts.”
Unlike New York Governor Kathy Hochul’s July executive order, which yokes data center developers under at least a one year moratorium, Shapiro’s action is not an outright ban. But this distinction belies the fact that Executive Order 2026-05 mandates onerous requirements for developers and extremely punitive measures for non-complying companies.
It’s about as stringent an action a government can take against the industry without outright banning data centers.
Per the order, Pennsylvania’s GRID guidance — a framework Shapiro rolled out in February — is now basically a requisite (not a suggestion) for permitting approval. Now, the PA Department of Environmental Protections (DEP) will evaluate projects only if they sign a GRID commitment. Additionally, data center projects must secure all local zoning and permitting approvals before they can receive state-level approval.
The most consequential elements of this GRID framework are as follows:
Data center developers must secure enough incremental capacity to cover 100% of peak demand and enough incremental energy to cover 100% of annual electricity consumption. In practice, that means a covered data center cannot simply rely on PA’s existing generation — it must be matched with new or expanded generation added since January 1, 2025 that qualifies as incremental. That supply can be on-site or procured from qualifying off-site resources, subject to PJM deliverability requirements.
Operators now have hard clean energy requirements (nuclear, hydro, wind, solar, fuel cells, geothermal, clean-hydrogen resources, or battery storage). Their total energy draw must comprise 10% clean energy by 2027, 14.5% by 2030, and 32% by 2035. Companies can pay a yet-to-be-determined fine to duck this requirement.
Data centers are required to create at least 200 construction jobs at prevailing rates during construction. They also must create 50 full-time jobs paying at least 125% of Pennsylvania’s statewide average wage within four years of the site’s commencement and ensure this payroll equals at least $1.5 million in annual gross compensation after this date. Plus, they have to commit at least $250 million in cumulative new investment into the site, with no specific timeframe given for this provision.
Shapiro is also pressing his energy council to steer PA Public Utilities Commission rules to require data centers to bankroll new transmission and other grid costs, in addition to stripping data centers of their critical load status (meaning they must curtail before other rate payers in the event of an energy shortfall). The executive order does not set these rules, but it encourages the PUC to consider them (similar to the new regulations we’re seeing in Texas with ERCOT/PUC’s revamp).
The executive order also erects new reporting requirements and red tap hurdles
New requirements for annual disclosures, beginning July 1, 2027, on monthly electricity and natural-gas consumption, peak energy usage, water consumption and source, and projected energy/water demand.
A community-benefit agreement with municipal governments addressing project phasing, noise/vibration/light mitigation, traffic, air quality, aesthetics, emergency services, local financial contributions, and other issues (this includes three public meetings on this info.
Environmental requirements, including performance-based facility certifications demonstrating energy/water efficiency, use of zero-emission backup systems where applicable or generators meeting Tier 4-equivalent emissions standards, limit generator operations, and installation of at least three continuous air-quality monitors (with this data made publicly available).
GRID’s Consent Order and Agreement is legally binding and requires applicable obligations to flow through to the data center’s operator, tenants, and other controlling end users. Developers must also disclose the identity of those parties to the Pennsylvania DEP within five business days of entering into a commercial agreement.
There are a few other odds-and-ends, but those are the most pressing changes.
Data center stocks with portfolio concentration in-state sold off on the news. Nebius (NASDAQ: NBIS) closed down 9.9%, while Keel Infrastructure (NASDAQ: KEEL) and Amazon (NASDAQ: AMZN) originally dipped on the news before closing up 2.9% and 2.5%, respectively.
Keel’s Sharon and Panther Creek sites should be grandfathered in, having secured zoning and most of the relevant permitting locally before the Executive Order’s August 18, 2026 cutoff, with the remaining permitting applications submitted but pending approval. Scrubgrass is another case entirely, however, as that site is still in the power study phase. Keel’s zoned sites arguably just became more valuable, so that’s a merit in their favor.
That said, the jobs mandate, incremental energy provision, and clean energy requirement are new hurdles that Keel and others will have to clear. The employment provision is probably easy enough to satisfy, but the other two could pose legitimate challenges.
Not that Keel is a special case here. Every operator in the state will now have more work ahead of them to realize their plans, and the looming question now is whether Shapiro just torched PA’s potential to be a rust-belt data center powerhouse.
-CMH
Daily Podcast
BLOCKSPACE
Josh Shapiro’s Data Center Executive Order (and What it Means for KEEL, NBIS), Plus a Look at National Data Center Pushback
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