PA Environment Digest Blog: PA Environmental Council: New State Budget Leaves A.I. Data Centers Unresolved, Big Win For Advanced Transmission Line Tech, Modest Progress On Other Energy Issues

Wednesday, July 15, 2026

PA Environmental Council: New State Budget Leaves A.I. Data Centers Unresolved, Big Win For Advanced Transmission Line Tech, Modest Progress On Other Energy Issues

The following analysis of the new state budget is reprinted from the Pennsylvania Environmental Council website.

On Sunday, July 12, Governor Josh Shapiro signed legislation enacting Pennsylvania’s state budget for fiscal year 2026-2027.

While the General Assembly missed the June 30 deadline to pass a budget, this year’s process was a dramatic improvement on the months-long stalemate that characterized last year’s.

The new $51.8 billion budget provides critical funding for state agencies and programs, and addresses several important energy issues via riders to the accompanying Fiscal Code, as well as in stand-alone legislation.

However, some of this year’s most pressing legislative issues-- particularly around addressing energy demand and data centers-- remain unresolved and now await action in the fall before the general election.

Grid modernization

One of the most significant outcomes of the concluded budget negotiation was final passage of legislation (first introduced as House Bill 2223) requiring utilities to consider Advanced Transmission Technologies (ATTs) in their infrastructure planning.

Innovations like dynamic line rating, advanced conductors, and advanced power flow controllers are cost-effective solutions already proven to improve the efficiency, reliability, and safety of the electric grid, and already being implemented by some electric distribution companies. [Read more here.]

The initial House version was approved in March, in a rare show of unanimous bipartisan consensus on the need to modernize Pennsylvania’s transmission systems.

With the governor’s signature, it’s now up to the Public Utility Commission to design the program’s requirements.

HB 2223 was a major priority for PEC this year, since ATTs have the potential to help meet rising demand for electricity by delivering more power through the existing grid, versus building costly new transmission infrastructure.

We applaud legislators and the governor for seeing it through.

First steps on data centers & energy

Other measures attached to the final budget bill take the first steps toward addressing data center development by requiring annual energy and water usage reporting (originally HB 2150), and requiring the regional grid operator, PJM, to submit load forecasting information (HB 1924) to the PUC, which will now be able to review contracts and agreements that affect existing forecasts.

Two other PEC-supported energy proposals were also enacted separately as part of the budget agreement.

Senate Bill 349 removes ambiguity around decommissioning and bonding requirements for solar generation facilities and provides assurance for communities, which should expedite projects.

And House Bill 2017, which allows the Department of Environmental Protection (DEP) to adjust permitting fees for small modular nuclear power reactors to help speed deployment.

Advanced nuclear technologies are among the most promising sources of zero-emitting power generation, and we are pleased to see leaders encourage innovation in this evolving industry.

Funding gap averted

Additionally, the state budget included a much-needed (though only one-time) infusion to the Hazardous Sites Cleanup Fund, which provides DEP with the means to monitor and manage numerous orphaned facilities that present a significant danger to communities.

PEC flagged this as a priority for the legislature back in February and March during budget hearings.

Unfinished business

Lawmakers left Harrisburg with more unresolved questions than answers.

Notwithstanding these accomplishments, the Senate failed to act on multiple bills advanced by the House this spring and summer to address the proliferation of data centers in Pennsylvania.

That inaction leaves considerable uncertainty around how these projects will impact the affordability and reliability of electrical service (HB 1834) and the availability and quality of local water resources (HB 2246).

It also leaves unanswered questions about performance standards upon which state assistance will be conditioned (HB 2650), and whether local governments have time and adequate resources to plan properly (HB 2151 and HB 2496).

The urgency surrounding these questions will only compound in the months ahead as legislators return to their districts-- many of them to campaign for reelection in the fall.

There also remain a number of bipartisan-supported energy bills, including warehouse solar, virtual power plants, use of utility-scale energy storage, and modernizing and expanding energy efficiency programs-- all of which will help lower costs and propel clean energy-- that await consideration and final passage.

Though we can all breathe a sigh of relief that Pennsylvania has avoided another protracted budget battle, the real work is unfinished and little time remains.

With your help, PEC will continue working with leaders to enact policy guardrails that protect consumers and communities, while ensuring that economic potential is matched with sound management and forward-looking practices and technologies.

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