Pennsylvania Gov. Josh Shapiro has introduced a new framework for large data center developments. Under the state’s GRID Standards, developers must secure certification before they can receive state incentives, expedited permitting, or tax-related benefits.
The move comes as residents raise concerns about the power demand, water consumption, and infrastructure burden tied to large-scale data center construction. Duane Morris Government Strategies said the standards connect public support with tighter oversight of projects seeking state help.
Certification becomes the entry point for state benefits
The Governor’s Responsible Infrastructure Development Standards require developers to pass a certification process managed by two state offices. Projects that receive certification may enter Pennsylvania’s Permit Fast Track Program and qualify for sales tax exemptions on computer equipment. They may also be eligible for selected tax programs.
Certification does not amount to permanent approval. Developers must file compliance reports before operations begin and submit annual updates after launch. State officials are also seeking legislation that would formally codify the GRID Standards and tie the existing data center tax exemption to certification.
New power costs must stay with developers
Energy rules sit at the center of the framework. Developers must cover the full cost of new power generation tied to their projects, rather than shifting those costs onto existing utility customers. Any added power capacity must come from new or incremental generation resources located within the same PJM Locational Deliverability Area.
Facilities larger than 100,000 square feet must also be designed to support future solar installations. That places energy planning much earlier in the development process.
Water use, efficiency, and end users must be disclosed
The standards also expand disclosure requirements. Developers must identify facility end users and hold public meetings before major design decisions are made. Project filings must include the size of the facility, expected water use, and efficiency metrics.
Local governments are entitled to early consultation before final plans are submitted. The structure pushes community input and municipal review closer to the front end of the approval process.
Investment and job targets are written into eligibility
To qualify, developers must commit at least $250 million in investment and create at least 200 construction jobs. The standards also require 50 permanent jobs within four years, with wages at no less than 125% of Pennsylvania’s average wage.
Hiring plans must explain how local workers will gain access to apprenticeships and construction opportunities. State support is being tied not only to infrastructure buildout, but also to local labor outcomes.
Separate bills could reshape tax breaks and local control
Lawmakers are advancing additional data center measures outside the governor’s framework. Sen. Tracy Pennycuick has proposed a bill that would require large facilities to provide power and stay within water limits. Her proposal would also create a Pennsylvania Data Center Advisory Committee and bar governments from signing nondisclosure agreements with developers.
A separate bill from Sen. Jarrett Coleman and Rep. Jamie Walsh would repeal the current equipment tax exemption. Their proposal would also allow temporary municipal pauses on data center applications so local governments can revise zoning rules.
According to the report, Pennsylvania’s current tax exemption could cost more than $517 million per year by fiscal 2030-31. State officials want that exemption tied to GRID certification rather than left broadly available.