Governor Josh Shapiro Issues Executive Order 2026-05 Imposing Guardrails on Mega AI Data Centers

HARRISBURG, PA — Addressing rapid growth in commercial artificial intelligence compute facilities across the commonwealth, Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05 on Monday, establishing the "Responsible Infrastructure Development" (GRID) framework to protect Pennsylvania ratepayers from soaring electricity prices and localized transmission blackouts driven by mega data centers.

The executive order creates a mandatory, dual-track regulatory permitting process administered jointly by the Pennsylvania Department of Environmental Protection (DEP) and the Pennsylvania Public Utility Commission (PUC). Under the new state framework, any prospective data center development with a projected peak electrical power demand exceeding 25 megawatts (MW) must submit a comprehensive Grid Impact and Clean Energy Mitigation Plan prior to receiving state environmental permits or municipal utility interconnection approvals.

Mandatory Clean Power Generation and Community Benefit Agreements

Executive Order 2026-05 imposes strict statutory obligations on hyperscale technology developers, requiring data center operators to secure or build dedicated off-site clean electricity generation—such as advanced nuclear small modular reactors (SMRs), utility-scale battery storage, or industrial geothermal power—to match at least 75% of their facility's electrical load, rather than siphoning power directly off existing residential grid lines.

Furthermore, developers must execute legally binding Community Benefit Agreements (CBAs) with local host municipalities, compensating local fire departments for specialized lithium-ion battery fire suppression gear, contributing to local school property tax stabilization funds, and funding local municipal water treatment upgrades to handle industrial evaporative cooling loads.

"Pennsylvania is open for business, and we want to lead the nation in technology, innovation, and artificial intelligence," Governor Shapiro stated at the executive signing ceremony. "However, we will not allow out-of-state mega-corporations to come into our commonwealth, overwhelm our power grid, and force working Pennsylvania families and small businesses to pay higher electric bills to subsidize massive computing server farms. This executive order establishes fair, common-sense guardrails that protect consumers while ensuring sustainable economic growth."

Pennsylvania Chamber of Commerce and Consumer Advocates React

The executive action received broad support from the Pennsylvania Office of Consumer Advocate (OCA) and municipal associations, who warned that unchecked data center load growth risked triggering steep transmission rate hikes on residential ratepayers across the PJM regional grid.

"Without proactive regulatory oversight, the massive electrical appetites of artificial intelligence facilities could strain local grid reliability and shift hundreds of millions in substation upgrade costs onto regular utility consumers," said Pennsylvania Consumer Advocate Patrick Cicero. "Governor Shapiro’s executive order ensures that technology companies pay their own way and invest in the local infrastructure necessary to support their operations."

The Pennsylvania Chamber of Business and Industry expressed cautious optimism, emphasizing that the state must maintain clear, predictable DEP permitting timelines so that responsible high-tech companies continue to view Pennsylvania as an attractive destination for capital investment.

Implementation Timeline and Rulemaking

Executive Order 2026-05 takes immediate legal effect. The DEP and PUC will publish detailed technical guidance and standardized application templates for data center GRID permits within 60 days, with the first mandatory compliance reviews taking effect for all facility applications submitted after November 1, 2026.