Pennsylvania will grant fast-track permits only to data centers that promise to draw electricity from new power plants and meet environmental and cost standards, according to an executive order issued Tuesday by Gov. Josh Shapiro. The order affects projects with peak demand exceeding 25 megawatts and directs the state Department of Environmental Protection to create a new review process. At least 81 cities and counties nationwide have frozen data center development entirely, a National League of Cities database released Wednesday showed, underscoring growing resistance to the facilities.
Under the framework, data centers that sign a consent agreement pledging to follow the state's infrastructure standards will get applications reviewed on a rolling basis, while those that don't must wait until they've secured all local permits and water-related authorizations before the state even considers their proposals. Projects must source power from new generators in the same PJM Interconnection zone where they're located and must use growing shares of firm clean energy like solar, advanced nuclear, and battery storage—starting at 10% on Jan. 1, ramping to 14.5% three years later, and hitting 32% by Jan. 1, 2035. PPL Electric has roughly 20.7 gigawatts of potential data center load with electric service agreements in Pennsylvania, while FirstEnergy utilities in the state have contracts totaling nearly 1 gigawatt, though it's unclear how the order will affect those projects.
Shapiro said in prepared remarks that Pennsylvania has "seen an unacceptable number of speculative proposals ... many of them led by developers who have no regard for local communities," citing the pace of development. Katie Blume, political and legislative director for Conservation Voters of Pennsylvania, told Utility Dive that "a lot of this [order] is going to be weeding out those bad actors because they're not going to want to spend five years in the permitting process." Jefferies equity analysts wrote in a Wednesday note that the order "should further close the door" to the notion that independent power producers like Talen Energy, Vistra, and PSEG Power can sell electricity from existing plants to data centers under long-term contracts in Pennsylvania, though Talen's legacy deal to supply power from its Susquehanna nuclear plant to an Amazon data center appears protected.
The order requires data centers to cover "all costs caused in whole or in part by the interconnection, service, or load" of their projects, including expenses tied to energy, transmission, distribution, and network upgrades, according to the infrastructure standards released in February. Jefferies analysts noted that Exelon, FirstEnergy, and PPL are "materially increasing their transmission investment with data center demand a key driver," warning that if data center growth slows, there's "downside pressure to the pace of transmission investments." Currently, transmission costs driven by data centers are being split with residential and other utility customers, they observed. The order also kicked existing data center projects out of the PA Permit Fast Track Program created in 2024 and barred state agencies from signing confidential deals with data center developers, signaling a harder line on an industry that's drawn both economic hope and local backlash.