Local lawmakers respond to Shapiro’s data center executive order

Local representatives had mixed responses to Gov. Josh Shapiro’s executive order withdrawing data centers from the state’s fast-track permit program and delaying DEP reviews until local approvals are secured unless developers agree to the Governor’s Responsible Infrastructure Development (GRID) requirements.

The order only allows data center projects that agree to follow these binding requirements (securing incremental capacity and energy to serve peak demand, deriving an increasing percentage of power from “dispatchable, clean firm energy resources” within Pennsylvania, and payment of all costs caused “in whole or in part by their project”) to begin DEP review before receiving local approvals.

Under the order, these projects will not be granted permits until securing local approvals, and data center projects that do not meet GRID requirements will not begin to be reviewed by the DEP until receiving all local approvals.

The order also removes all current data center projects from the PA Permit Fast Track Program (established in 2024), bans non-disclosure agreements for data centers “for all agencies under the Governor’s jurisdiction,” and requires data centers to file an annual energy and water consumption report starting next July.

Effects of data centers on the electric grid and a resulting increase in capacity charges to residential users and concern about speculative proposals were among the reasons cited by Shapiro for the order, as well as popular demand from Pennsylvania residents. The order also contains policy recommendations.

State Rep. Russ Diamond (R-102) and state Senator Chris Gebhard (R-48) pointed out that the order comes in an election year, with Diamond calling it “an election year ploy of a candidate who simply puts his finger to the wind to determine his beliefs.” Diamond said requiring infrastructure plans for developments was “a solid idea worth discussing” for data centers and other uses.

Gebhard echoed Diamond’s sentiments, adding that the Senate included data center transparency in this year’s budget and recently voted to revoke the sales tax exemption for data centers (HB 1667, which passed with a 44-6 vote and is now in the House). He referenced a comment by Shapiro last year that the state was “all in on AI,” made when Shapiro announced a $20 billion Amazon AI infrastructure investment.

Rep. John Schlegel (R-101) said he had heard from many constituents who are concerned about data center development, and he believes municipal governments should have more control over the process. He said the state House is reviewing several bills related to data centers, and “this is likely not the last word on data center development.”

Among the bills in consideration are HB-2533, which would allow municipalities to place a temporary moratorium on data centers for up to 18 months to update zoning ordinances (now in the House Local Government committee); HB-2150, which would establish energy and water reporting requirements (passed the House, now in the Senate Environmental Resources and Energy committee); and HB-2151, which would direct the Local Government Commission to create a model ordinance for reference by municipalities (now in the Senate Local Government committee).

Lebanon County municipalities have recently faced a wave of concern by residents about the potential development of data centers, including possible strain on electric and water utilities. A proposed $1.7 billion data center in South Annville Township was ultimately withdrawn after residents overwhelmingly voiced opposition for the project, which would have required an amendment to the township’s zoning ordinance and map.

Multiple municipalities, which previously did not address data centers in their ordinances, have passed or are developing ordinances to regulate and restrict them to certain zoning districts. A recently passed ordinance in Swatara Township was described as interim, intended to be updated alongside changes to state law. New development plans are considered under the code that was in effect when they were submitted, which has created a rush in some municipalities to update zoning ordinances.

This comes alongside more general worries about development extending to projects like solar farms, warehouses, and residential developments; residents anticipate many large projects will bring high traffic onto already-congested and potentially unsafe roads, affect the property values of nearby homes, generate excess noise and light, or lead to stormwater runoff onto adjacent properties.

Though the executive order prevents data center developers that do not follow GRID requirements from beginning the DEP permitting process before receiving local approval, it does not expand municipal regulatory powers.

Solicitors in multiple municipalities have warned governing bodies against banning or placing a moratorium on uses altogether, and have advised that under current law, every use must be allowed in at least one developable location.

During a meeting July 13, Cornwall Borough solicitor Josele Cleary said Pennsylvania law generally favors developers’ rights and places limited powers in municipalities. Municipalities may establish zoning requirements that require setbacks, screening, performance standards, lot requirements, and other items, but cannot ban uses outright or create “exclusionary zoning,” in which there is no developable land for certain uses.

“The Pennsylvania Municipalities Planning Code is a very landowner-oriented statute,” Cleary said in July. “If citizens are upset with that, then the complaints should be made to Harrisburg because your state senator and your state representatives are the ones who have voted on the municipality’s planning code, are the ones who have the power to amend it.”