Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05 on August 18, requiring all data center developers seeking state permits to comply with a new set of strict requirements governing energy costs, environmental protection, workforce development, and community engagement, or face significant barriers to moving forward with their projects.

The Core of the Order

The Executive Order directs the Pennsylvania Department of Environmental Protection to evaluate permit applications from proposed data centers only if developers have made a legally binding commitment to meet what Shapiro calls the Responsible Infrastructure Development Requirements, referred to as the GRID Requirements, and have received local approval from the communities where they intend to build.

The order also immediately removes all artificial intelligence data center projects from Pennsylvania's Permit Fast Track Program and prohibits those projects from being considered for that program going forward.

In addition, the use of nondisclosure agreements in connection with data center projects is explicitly prohibited under the new order.

What Developers Must Agree To

Under the GRID Requirements, developers must make legally enforceable commitments, formalized through a Consent Order and Agreement with the Department of Environmental Protection. The requirements cover five broad areas.

On energy costs, developers must pay the full cost of any new electricity generation, transmission, distribution, and other infrastructure needed to power their projects, with no shifting of those costs onto Pennsylvania households or businesses.

On community engagement, developers are required to commit to open and transparent outreach, including detailed community outreach plans that notify impacted local governments, hold public meetings, and provide consultation early enough in the project timeline to allow meaningful public input on major design decisions.

On workforce and economic development, developers must hire and train local workers and enter into community benefit agreements that invest in local priorities, including schools, infrastructure, and long-term economic development.

On environmental protection, developers must meet what the order describes as the highest standards, including strict water conservation requirements.

A Two-Track Review Process

The Executive Order creates distinct permitting pathways depending on whether a developer agrees to meet the GRID Requirements.

For developers who commit to the GRID Requirements, the Department of Environmental Protection will continue to review qualifying permit applications as they are submitted and found to be compliant under Pennsylvania law.

However, unlike prior practice, DEP will not issue any permit until the project has received all required local approvals. Permits issued under this track will incorporate the GRID Requirements as warranted.

For developers who do not agree to meet the GRID Requirements, DEP will not even begin reviewing permit applications until after all required local approvals are secured and every permit application required for construction has been reviewed and found to be compliant.

This two-track structure applies to all new data center permit applications going forward.

The Department of Revenue is also directed to update the Computer Data Center Equipment Exemption Program guidelines to ensure that applicants for the state's sales and use tax exemption must also comply with the GRID Requirements.

Local Communities Gain Greater Authority

A recurring theme in both the Executive Order and the statements accompanying its signing is the expansion of local municipal authority over data center development decisions.

The order is explicitly structured so that no state permit can be issued until local approval has been obtained, regardless of where a developer falls in the GRID compliance process. Shapiro tied the order directly to conversations he said he had with Pennsylvania residents over the past year.

"Over the past year, I've listened to the people of Pennsylvania, and I've heard directly from many residents across our Commonwealth who are concerned about what data center development could mean for our communities, our environment, and our utility bills," Shapiro said.

"My message to data center developers is clear: if you can't agree to our strict requirements and get the community where you want to build to say 'yes,' you're not going to have the Commonwealth's support either," Shapiro added, that the companies pursuing data center development are among the largest in the world and are capable of meeting the standards being set.

"These are some of the biggest companies in the world; they can afford to be good neighbors, follow the rules, and do this right," he said.

Environmental Concerns Drive the Administration's Posture

Lieutenant Governor Austin Davis, in remarks accompanying the signing, framed the order in environmental and generational terms.

"I grew up in southwestern Pennsylvania and remember when our air was thick with smoke, and our rivers were dying, but we've seen so much improvement over the past three decades," Davis said.

"As a parent, I think every single day about the kind of world I want to leave to my daughter, and that world has clean air for everyone to breathe and plentiful clean water for everyone to drink." Davis described the order as a measure to stop what he characterized as bad actors.

"Governor Shapiro and I will stop the bad actors who are trying to come into Pennsylvania and build dangerous projects that ignore the will of the people," he said.

Transparency Requirements and the End of NDAs

Beyond the permitting and compliance framework, the Executive Order implements new public transparency requirements for data center developers operating in or seeking to operate in Pennsylvania.

The prohibition on nondisclosure agreements represents a direct policy shift, eliminating a tool that developers have historically used to limit public disclosure about project plans and negotiations with local governments and utilities.