Pennsylvania’s Executive Order Aims to Regulate Data Center Development
Submitted by Ethan Howland of UtilityDive
Pennsylvania has implemented an executive order issued by Gov. Josh Shapiro, D, that will provide preferential permitting treatment to data center projects committing to specific power supply, environmental, and cost-responsibility requirements.
The state’s Department of Environmental Protection will oversee the new review process, which mandates that data center projects with a peak demand of over 25 MW must source their electricity from new power supplies, including a growing proportion of firm clean power.
This order is aimed at limiting the ability of independent power producers like Talen Energy, Vistra, and PSEG Power to sell power from existing generating assets to data centers in Pennsylvania. However, existing contracts such as Talen’s deal to supply power from the Susquehanna nuclear power plant to an Amazon data center are exempt.
Shapiro’s executive order is part of a broader trend of state and local governments imposing restrictions on data center development. At least 81 cities and counties currently have moratoria on data center development.
Under the new permitting framework, data center developers that agree to adhere to the state’s infrastructure development standards will receive expedited processing compared to those who do not.
Applicants that sign a consent order and agreement will have their projects reviewed by the DEP on a rolling basis. Those who do not sign will need to have all local permits and necessary authorizations in place before their applications are considered.
Katie Blume, political and legislative director for Conservation Voters of Pennsylvania, believes the order will help filter out speculative and irresponsible data center developers.
However, Dan Diorio, executive vice president for state policy and government affairs for the Data Center Coalition, expressed concerns about changing rules impacting ongoing investments in verified and responsible data center projects.
The infrastructure standards include requirements for data centers to cover costs associated with their projects’ energy needs and to source a percentage of their power from clean energy sources like solar, advanced nuclear, and battery storage.
Shapiro emphasized the importance of clean energy in data center development, with the requirement for clean energy sourcing increasing over the next few years.
The executive order also directs the DEP to expedite permitting for clean energy and storage facilities on brownfield sites and to promote the use of advanced transmission technologies.
PPL Electric and FirstEnergy utilities in Pennsylvania have significant data center load and contracts, respectively, which could be impacted by the new order.
Exelon, FirstEnergy, and PPL are expected to increase their transmission investments due to data center demand, but a slowdown in data center growth could affect these investments.
Shapiro’s order removes existing data center projects from the PA Permit Fast Track Program and prohibits state agencies from entering into confidential agreements with data center developers.
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