Overview
Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05 on August 18, 2026, imposing what his administration described as the "nation's strictest guardrails" on artificial intelligence (AI) data center development in the state. The order takes effect immediately and represents a significant policy reversal for Shapiro, who had previously championed the industry's expansion in the Commonwealth.
Key Provisions
<cite index="2-3">The order directs the Pennsylvania Department of Environmental Protection (DEP) to review permit applications only if developers have made a legally binding commitment to meet the Governor's Responsible Infrastructure Development (GRID) Requirements and have received local approval.</cite>
<cite index="2-4">The GRID Requirements demand developers meet strict standards on energy affordability, environmental protection, workforce and economic development, transparency, and community engagement.</cite>
<cite index="4-4">The Governor is also immediately removing all AI data center projects from the Pennsylvania Permit Fast Track Program and will not consider data center projects for the program going forward.</cite>
<cite index="3-14">All state agencies are also barred from signing nondisclosure agreements, or NDAs, related to data centers, the executive order states.</cite>
<cite index="18-5">The order requires prospective developers to provide a notice of intent to comply with the safeguards, which include requiring that firms pay for all electricity costs associated with their facilities and mandating they get a significant portion of that power from clean energy sources.</cite>
<cite index="9-1">If developers refuse to comply with the requirements, they will not receive the approvals needed to build a data center in Pennsylvania and will be disqualified from an existing sales tax exemption for data center equipment.</cite>
Context and Scale
<cite index="10-4,10-5">In the last year, the DEP became aware of an unprecedented number of data center proposals, with over 100 projects reported in publicly sourced databases and 58 projects engaged with the DEP to discuss permitting at some level of formality; of those, 15 have applied for at least one DEP permit, and only five have received all necessary permits required for their first phase of development.</cite>
<cite index="8-1">The executive order marks a significant policy reversal for Shapiro after initially championing the industry with a $20 billion Amazon commitment.</cite> <cite index="18-7">Shapiro also removed all data centers from his administration's Fast Track permitting program, under which Amazon received permission last year to invest $20 billion to construct two data centers in Luzerne and Bucks counties.</cite>
Legislative Background
<cite index="1-9,1-10">Shapiro said his administration tried to pass these requirements through legislation, and the House approved the GRID requirements on a bipartisan basis; however, the Senate refused to bring the measure up for a vote.</cite> <cite index="11-11">Data center developers are now required to implement the GRID standards, which were passed by the state House but stalled in the Senate.</cite>
<cite index="8-4">Shapiro's order includes a severability clause — uncommon in executive orders — suggesting his administration anticipated legal challenges from the data center industry.</cite>
Industry and Public Response
<cite index="8-5">The Data Center Coalition, representing Amazon, Microsoft, and other major developers, criticized the order for changing rules "midstream" for "verified and responsible data center projects," though Amazon's existing Pennsylvania projects will be required to comply with GRID standards going forward.</cite>
<cite index="12-8">Pennsylvania Senate Republicans said the order represented Shapiro walking back previous statements on data centers, noting that "a year ago, Governor Shapiro proudly announced his administration was 'already all in on AI' and 'the future of AI is going to run right here through the Commonwealth of Pennsylvania.'"</cite>
<cite index="14-9">As part of the executive order, the Pennsylvania DEP now has its own data center permit tracker displaying in-progress proposals across the state.</cite>
<cite index="7-1,7-2">The far-reaching order does not include a moratorium on data center development; however, it requires local approval to receive state permits, which in effect may block many from moving forward.</cite>