The Shapiro Administration is also rolling out a new 12-page Local Government Data Center Planning Toolkit through the Governor’s Center for Local Government Services (GCLGS) to help municipalities navigate data center proposals and make informed decisions that work best for their communities.
Background
First introduced in the Governor’s 2026-27 budget address, the GRID Standards set expectations for developers seeking support from the Commonwealth — including coordinated project support through the Commonwealth’s Office of Transformation and Opportunity (OTO), greater speed and certainty in permitting, and access to state tax incentives.
Developed with input from local leaders, organized labor, industry, and environmental stakeholders, the Governor said the GRID Standards outline specific steps data center developers must take to demonstrate that proposed projects provide real value to local communities, mitigate or offset any impacts on Pennsylvanians, and are being developed responsibly.
“As Pennsylvania continues to compete for major economic development projects and lead on innovation, we have a responsibility to set strict accountability standards and ensure these projects create real opportunity for our communities,” said Governor Shapiro.
“I’ve heard directly from Pennsylvanians who are concerned about the impact data center development could have on their communities, the environment, and their utility bills.
“That’s why I am putting clear guardrails in place to hold developers accountable to protect consumers, strengthen communities, and put Pennsylvanians first.
"If companies want the Commonwealth’s full support — they must meet strong standards on energy affordability, clean energy generation, transparency, workforce development, community impact, and environmental protection.
“This is about setting a higher bar for projects and ensuring development happens responsibly and in a way that benefits Pennsylvanians.”
GRID Certification
The GRID Standards require developers seeking Commonwealth support to submit a joint application for GRID Certification to the Office of Transformation and Opportunity (OTO) and the Department of Revenue (DOR) outlining how they will meet four standards: protecting energy affordability, promoting transparency and community engagement, supporting the workforce and economic development, and protecting the environment.
“Companies and developers are looking to build data centers all across the country, and Pennsylvania is uniquely positioned to be selective on which projects can bring economic opportunity to our Commonwealth without hurting local communities,” said Department of Community and Economic Development Secretary Rick Siger.
“The Shapiro Administration is focused on supporting good projects here in Pennsylvania by setting strict standards that require developers to pay entirely for their own energy needs, meet our environmental requirements, create local jobs, and deliver millions in additional tax revenue to our cities, townships, and boroughs.”
Permit Fast Track
If the application meets the requirements laid out in the GRID Standards, OTO and DOR will grant the project GRID certification and it will become eligible to participate in OTO’s PA Permit Fast Track Program, which streamlines permitting for high-impact economic development and infrastructure projects requiring permits from multiple Commonwealth agencies.
Changing Tax Credit Eligibility
Currently, data center developers must be certified through DOR to qualify for a sales and use tax exemption for the Computer Data Center Equipment Exemption Program under Act 25 of 2021.
This program provides an exemption from Pennsylvania sales tax when computer data center equipment is sold to, used, or consumed in a certified data center by an owner, operator, or qualified tenant.
As part of the GRID Standards, the Shapiro Administration is calling on the General Assembly to pass legislation amending that tax benefit.
Once this legislation is signed into law, developers will be required to secure GRID certification in order to be eligible for tax benefits for the purchase of computer data center equipment.
Without Changes, Tax Credit Will Cost Taxpayers $517 Million
If left unchanged, the current sales and use tax exemption is projected to cost the Commonwealth more than $517 million annually by FY 2030-31.
The Shapiro Administration’s proposal would require GRID applicants to use that revenue to invest in key public priorities, including investing in education, protecting our environment, upgrading our infrastructure, supporting public safety, and expanding workforce development.
OTO will post detailed information about each project that earns GRID certification on its website.
Third-Party Validation
Once operational, projects must provide annual reporting and third-party-validated documentation to maintain GRID certification and associated tax benefits on an ongoing basis.
If the developer fails to meet requirements, DOR may revoke GRID certification and recapture all or part of the tax benefits provided.
GRID Standards
The GRID Standards focus on four key areas, with multiple accountability measures in place to ensure developers adhere to the Standards if they want to receive Commonwealth support:
-- Protecting Energy Affordability: In its initial application for GRID certification, a project developer must provide DOR and OTO with an energy plan detailing how it will provide for its energy needs without imposing costs on Pennsylvanians and other utility ratepayers.
Developers must agree to build, bring online, or buy incremental electric capacity needed to meet new energy demand while paying the full cost of the capacity.
That capacity must generally come from resources located within the same deliverability area as the proposed GRID project, and must also include increasing percentages of energy coming from dispatchable clean firm energy resources located within the Commonwealth, up to 32 percent in 2035.
Developers must also pay all costs associated with interconnection, transmission, distribution, network upgrades, ancillary services, or dedicated facilities caused in whole or in part by the project’s electricity demand.
-- Promoting Transparency and Community Engagement: Developers seeking GRID certification must provide DOR and OTO with a community outreach plan that promotes public engagement and transparency, including commitments to notify impacted local governments, hold public meetings, and consult with municipal leaders at a sufficiently early stage of the project to enable meaningful public input on key design decisions.
Developers must also provide information on the end user(s) for the data center and a footprint report detailing the project’s planned building size, campus acreage, estimated peak electric demand, estimated annual water consumption and water source, percentage of electricity sourced from non-emitting resources, and expected Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE).
-- Supporting Workforce and Economic Development: Developers must provide DOR and OTO with a community benefit plan detailing anticipated contributions to the state and local community beyond existing legal obligations.
To qualify for GRID certification, developers must commit to making at least $250 million in cumulative new investment, creating at least 200 prevailing wage construction jobs, at least 50 jobs paying at least 125 percent of Pennsylvania’s average statewide wage by the fourth anniversary of certification, and then paying at least $1.5 million to employees at the project site after the fourth anniversary.
Developers must also submit hiring and workforce training plans that encourage local workforce participation, including the use of registered apprenticeship programs and skilled construction labor, and enter into community benefit agreements addressing issues such as traffic studies, noise and lighting mitigation, air quality requirements, emergency management coordination, aesthetic concerns, and financial contributions toward local priorities.
-- Strengthening Environmental Protection: Developers must provide DOR and OTO with a sustainability plan detailing how they will deploy advanced technology to limit water and energy consumption by the data center through certifications such as LEED for Data Centers, EPA Energy Star, GBI Green Globes, or International Organization for Standardization certification for data centers.
Developers must also commit to minimizing local air pollutants by using zero-emission energy storage systems where possible or backup generators meeting strict emissions standards and operational practices that materially reduce emissions.
For projects located within the watershed of a “High Quality/Exceptional Value Water” or within areas identified as “Pennsylvania Climate Change Connectivity” by the PA Natural Heritage Program, developers must also commit to supporting the monitoring and mitigation of impacts to land, water, and biological resources beyond existing regulatory and permitting requirements.
Local Government Toolkit
The Shapiro Administration is rolling out a new 12-page Local Government Data Center Planning Toolkit through the Governor’s Center for Local Government Services (GCLGS) to help municipalities navigate data center proposals and make informed decisions that work best for their communities.
As Pennsylvania communities increasingly receive inquiries about data center development, the toolkit will provide practical guidance for local officials on issues such as zoning, infrastructure capacity, resource use, fiscal impacts, and community benefits.
Additionally, GRID certification can serve as a clear standard to help local communities identify projects that have committed to protecting energy affordability, promoting transparency and community engagement, supporting workforce and economic development, and protecting the environment.
[Model local government ordinances regulating data centers are available now from--
-- Tri-County Regional Planning Commission
-- Chester, Montgomery County Data Center Ordinance Guide
-- PennFuture
Legislation
The Shapiro Administration is working with leaders in the General Assembly to introduce accompanying legislation that will codify the GRID Standards into law.
Governor Shapiro and members of the Pennsylvania House who have supported these efforts share a common goal of protecting Pennsylvania communities and establishing strong, commonsense rules governing the rapidly growing data center industry.
The Administration has also worked closely with Representative Rob Matzie and the co-sponsors of House Bill 1834, which passed the House of Representatives in late March, to help establish baseline standards for how data centers should operate in Pennsylvania. [Read more here.]
The GRID Standards build on that foundation by incorporating the bill’s clean firm energy requirements and encouraging developers to meet even stronger standards if they want to receive tax benefits and other Commonwealth support.
Click Here for the full GRID standards.
Click Here for the Governor’s announcement.
Reaction
The Pennsylvania Environmental Council released this statement on the Governor's announcement--
“We commend Governor Shapiro for establishing principles whereby data center development in Pennsylvania avoids undue energy, environmental, and community impacts,” PEC President Tom Gilbert said.
“In combination with legislation already advancing through the General Assembly with bipartisan support, GRID can help ensure that Pennsylvania develops this industry responsibly by advancing more diverse and clean energy generation, safeguarding water resources, protecting ratepayers, and ensuring transparency and public engagement.”
“As we have stated before, data centers bring economic, employment, and tax benefits to the Commonwealth.
“But they also present significant potential for environmental, energy, and community impacts that can and must be addressed.
“With state budget negotiations ramping up over the next month, we have an opportunity-- but also a tight window-- to enact measures needed to ensure both the effectiveness of the GRID strategy and the responsible development of data centers generally.”
Legislative Actions Needed
“In addition to effectuating GRID’s provisions, there are other key issues related to data center development outside the scope of the Governor’s proposal that need to be addressed.
“And while there are a large number of bills currently in the General Assembly on this topic, introduced by both parties and in both chambers, four of them are worth prioritizing due to their bipartisan support and the fact that they have already passed the House of Representatives.
-- House Bill 1834: The focus of this legislation is to ensure that data centers pay for the cost of their own power and grid costs, and contribute to consumer assistance programs.
GRID relies in part on these elements of the legislation. But the bill also includes provisions to require bringing more clean-firm (renewables with storage, geothermal, nuclear) generation onto the grid, whether through direct procurement by the data center or contribution into a fund for project development. that can bring these projects online.
This creates an overall benefit of greater diversity and overall generation on the grid, directly helping with energy supply, as well as lower and more stable energy costs.
-- House Bill 2246: House Bill 2246 addresses the issue of water usage by data centers, directing the state Department of Environmental Protection (DEP) to develop a reporting and permitting program for large-scale withdrawals.
As with energy, water usage by data centers – particularly how water is sourced and whether that use is consumptive (i.e. does not return water to the source) – is a risk factor with data center development.
This legislation would help ensure that a proper management and reporting program is in place to avoid unintended consequences.
-- House Bill 2150: This legislation requires annual public reporting on energy and water usage by data centers, allowing the state to identify trends and potential resource issues.
GRID would require this as well, but HB 2150 would make the requirement applicable to all larger scale data center development – not just to those that pursue the GRID certification process.
-- House Bill 2151: HB 2151 directs the state’s Local Government Commission to provide a model data center development ordinance that local governments, if they so choose, could adopt or modify for use. Given that local governments are often challenged by lack of capacity, providing sample provisions can prove helpful in guiding efforts.
Next Steps
“In June the General Assembly will enter its busiest month of the year as it begins shaping the state’s annual operating budget.
“As has become routine, this is also the time when consequential legislation is negotiated and passed.
“Without question, GRID combined with the leading data center bills should be at the top of that list, along with other legislation to help proactively address ongoing energy challenges.
Molly Parzen, Executive Director of Conservation Voters of Pennsylvania, issued this statement--
"We applaud Governor Shapiro for releasing additional standards to bring long-overdue accountability to the rapidly expanding data center industry in Pennsylvania.
"This initiative from the Governor is a step in the right direction to protect Pennsylvanians by establishing clear metrics around energy affordability, environmental protection, community engagement, and workforce development.
“These standards recognize that we cannot allow Big Tech to threaten our environment or our financial stability.
"Yet while we appreciate the Governor’s attempt to incentivize data centers to behave responsibly, the legislature and administration must continue to act to mandate that every data center developer is held to a high standard that protects our communities.
"The state House of Representatives has taken the first step by advancing key protections for our communities and working families.
"The legislation that House Democrats passed would require data centers pay their fair share for grid upgrades and couple their expansion with new clean energy to limit the impact on energy prices and by providing municipalities with tools to respond to data center proposals in their communities.
"The ball is now squarely in the court of the Senate, particularly Republican leadership. They must decide whether they will stand with multi-billion-dollar tech corporations or Pennsylvania families struggling under skyrocketing electricity costs.
"Pennsylvanians need Senate Republicans to work with the Governor and their colleagues in the House to hold data centers accountable and protect our clean air and water, safeguard impacted communities from unmitigated development and ensure working families are shielded from skyrocketing electricity prices.
"It is time for the Senate to take up these critical protections and put Pennsylvania ratepayers ahead of Big Tech profits."
Robert Routh, Pennsylvania Policy Director, Climate & Energy, at the Natural Resources Defense Council, released this comment--
“Pennsylvania is faced with unprecedented challenges and opportunities related to data centers – new ‘large loads’ characterized by their significant demands for electricity and water.
"Governor Shapiro has put a clear stake in the ground. Any data center developer that wants certainty about speed-to-market in Pennsylvania must commit to fully paying for their energy needs.
"That includes bringing all new capacity – with targets for clean firm energy resources and battery storage – and paying for all associated grid infrastructure upgrades while also being built ‘solar ready.’
“Governor Shapiro recognizes that data centers’ unmitigated energy consumption could cost consumers tens of billions of dollars and risk life-threatening power outages.
"Coupled with the PUC’s recently finalized model guidance on large load interconnections, Pennsylvania is taking important steps to advance energy affordability.
"Nevertheless, the most significant and effective state guardrails will have the full force of law.
"Next, the General Assembly must put House Bill 1834 on Governor Shapiro’s desk and amend existing tax law to fully implement the GRID principles.”
Clean Power PA Chair Katie Blume made the following statement on the full GRID standards--
“Clean Power PA welcomes Governor Shapiro’s Responsible Infrastructure Development (GRID) Standards as an important step toward ensuring data center growth in Pennsylvania happens responsibly-- with real protections for families, small businesses, and host communities.
“We’re especially encouraged that the GRID Standards connect data center growth to cleaner power over time-- including clean firm energy requirements that ramp from 10% in 2027, to 14.5% in 2030, and 32% by 2035-- reflecting a basic reality: we will not meet surging demand affordably or reliably without bringing new clean energy online.
“Pennsylvanians are right to expect that massive new electricity users won’t drive up everyone else’s bills or strain a grid that’s already under pressure.
“The GRID Standards move the Commonwealth in the right direction by setting clear expectations for projects seeking state support: data centers should cover the full costs associated with their interconnection and load, and they should build, bring, or buy new electric capacity to match their growth — not shift costs onto ratepayers.
“We also appreciate that the Standards elevate common-sense requirements that communities have been demanding: transparency about who is behind a project, early and meaningful public engagement, and enforceable commitments around workforce and local economic benefits.
“If local communities decide-- after a full and open process-- to host major data center development, they deserve to know what’s being built, how it will affect local resources, and how developers will mitigate impacts like noise, water use, and air pollution.
“At the same time, GRID should be seen as a foundation — not the finish line. Because these standards apply to projects seeking state incentives, the next step must be legislative action to help ensure strong, binding protections apply across the board.
“Clean Power PA will continue working with partners and lawmakers to advance HB 1834 and other reforms that protect consumers from paying the costs of serving data centers, require large developers to contribute fairly to programs that help vulnerable families cover their energy bills, and encourage the clean energy investments needed to strengthen reliability.
“Pennsylvania can welcome new investment — but only if it’s done in a way that puts affordability, accountability, and clean energy at the center.”
Related Articles This Week:
-- PUC: Electric Utilities Changing Cost Of Electricity For Customers On June 1 From 0.05% to 19.8% [PaEN]
-- PUC Schedules In-Person, Telephonic Public Hearings On 13.1% Rate Increase Proposed By Peoples Natural Gas Starting June 2 [PaEN]
-- Choose Clean Water Coalition: Legislative Recommendations To Protect Pennsylvania's Waterways For The Future - Agriculture, Abandoned Mines, PFAS, Lead, A.I. Data Centers [PaEN]
-- Utility Dive: US Dept. Of Energy Grants PJM Request For Emergency Order To Curtail A.I. Data Center Use Of Electricity From The Grid And Go To Back-Up Generators To Cope With May 18-20 Hot Weather Alert [PaEN]
-- PJM Interconnection: Extends Maximum Generation Alert To May 19; Issues Pre-Emergency Demand Response Call To 3 Utilities; Hot Weather Alert Extended To May 20 For Mid-Atlantic Zone [PaEN]
-- North American Electric Reliability Corp Summer Reliability Outlook Says Record Additions Of Generation- Solar, Batteries And Some Natural Gas- Have Strengthened Readiness, But Elevated Risks Remain [PaEN]
-- Eastern PA Coalition For Abandoned Mine Reclamation-FYI: A.I. Data Center Accountability ToolKit
-- DEP Invites Comments On Stormwater Permit For PPL Electric Tek Park Transmission Line Project To Connect To Proposed A.I. Data Center In Upper Macungie Twp., Lehigh County [PaEN]
-- DEP Invites Comments On PECO Brandon Shores Retirement 500 kV Transmission Line Reconstruction Project Stormwater Permit In York County [PaEN]
-- DEP Accepting Comments On Stormwater Permit For The Mid Atlantic Interstate Transmission LLC Ashtabula-Erie West 345kV Rehabilitation Project In Erie County [PaEN]
NewsClips:
-- Scranton Times: Valley View School District Acknowledged Talks On Selling Archbald Schools If They Were Surrounded By A.I. Data Centers; District Joins Archbald Boro In Legal Battle Against Data Centers [PDF of Article]
-- Scranton Times - Chris Kelly Opinion: The ‘Pro-Human Party’ vs. A.I. Data Centers
-- Wall Street Journal: The Only Thing Growing Faster Than The A.I. Industry Is The Opposition Against It - Booed Commencement Speakers, Blocked Data Centers, Plummeting Poll Numbers
-- Fortune Magazine: Americans’ A.I. Hate Wave Might Just Be Gathering Steam: Data Centers Could Hike Power Costs In Some States Over 50% By 2030
[Posted: May 27, 2026] PA Environment Digest
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