News · Data & AI Infrastructure
Pennsylvania Ties Data Center Permits to Self-Supplied Power and Local Approval
Pennsylvania's governor made state permits conditional on developers bringing their own power and winning local approval, days after PJM asked regulators to curtail new data centers first in shortages. Grid access is becoming something AI capacity must earn.
By The AI Enterprise Magazine Team4 min readNews · Weekly briefing
Key takeaways
- Permits now come with conditions. Pennsylvania will review data center permits only after developers sign binding GRID commitments and secure local approval.
- The grid operator is moving too. PJM asked FERC to curtail new 50 MW-plus sites first in shortages unless they secure their own supply by June 1, 2027.
- Speculative projects face a filter. Of more than 100 proposed Pennsylvania projects, only five hold all permits for a first phase.
- Enterprises should ask about power. Colocation and cloud capacity in PJM territory may carry higher costs and longer timelines.
Week of August 17, 2026
Five Pennsylvania Data Center Projects Hold All First-Phase Permits
Pennsylvania counts more than 100 proposed data centers, but few have progressed; Gov. Shapiro called most proposals "completely speculative."
View the data
| Projects | |
|---|---|
| Engaged with regulators | 58 |
| Applied for a permit | 15 |
| Hold all first-phase permits | 5 |
Pennsylvania Gov. Josh Shapiro signed an executive order on Tuesday that makes state permits for new data centers conditional on developers bringing their own power, paying the full cost of the grid upgrades they need and winning local approval first. The order lands days after PJM Interconnection, the grid operator for 13 states and Washington, D.C., asked federal regulators to let it cut power to new large data centers first during shortages unless they secure their own supply. For enterprises planning AI capacity in the eastern United States, the message from both is the same: grid power is becoming a condition to be earned, not a utility to be assumed.
What does Pennsylvania's data center executive order require?
Executive Order 2026-05 tells the state Department of Environmental Protection to review a data center's permit applications only after the developer signs a binding consent agreement to meet the governor's GRID standards and has local approval, according to the governor's office. The four standards cover paying for required infrastructure, early community outreach, local hiring with community benefit agreements, and strict environmental and water conservation rules.
The order also removes data centers from the state's fast-track permitting program, bars nondisclosure agreements on data center projects and ties an existing sales tax exemption for data center equipment to GRID compliance. A special counsel will pursue rules under which data centers lose power before other customers during grid stress and pay the costs of PJM's emergency backstop procurement themselves.
Developers must also supply their own power, including 10% from clean sources, Axios reported. Shapiro acted by executive order after the state Senate did not take up a GRID bill that passed the House with bipartisan support, Axios reported.
The state counts more than 100 proposed projects, but only 58 have engaged with regulators, 15 have applied for a permit and five hold all permits for a first phase. Shapiro called most proposals "completely speculative," Fox 29 reported.
Why is PJM asking data centers to bring their own power?
PJM's filing, made with the Federal Energy Regulatory Commission last week, follows two capacity auctions that failed to secure enough generation, Tom's Hardware reported, citing Reuters. Under the proposal, new sites drawing 50 megawatts or more that connect without their own generation or secured supply by June 1, 2027 would be curtailed before PJM calls on its paid demand response programs. A new registry would track every such site. Existing facilities would not be affected.
PJM projects about 70 gigawatts of new large load by 2038, while about 15 gigawatts of generation has retired since 2022. Its July auction for 2028/29 cleared at the price cap and came in about 6,800 megawatts short. The filing also includes up to $20 billion for new plants serving data centers built through 2027, with proposals due starting September 30, and PJM asked FERC to make the rules effective by October 12, West Virginia Public Broadcasting reported.
How has the industry responded?
The Data Center Coalition said its members take compliance seriously but warned against changing rules for projects already underway. Executive Vice President Dan Diorio argued that one-size-fits-all policies risk discouraging investment and jobs, Bloomberg Law reported. The pressure in Pennsylvania runs in both directions. State Treasurer Stacy Garrity, Shapiro's Republican opponent in this year's governor's race, repeated her call to pause all new data center development, according to Axios.
Shapiro, for his part, did not back local moratoriums.
What does this mean for enterprise AI infrastructure plans?
Most large enterprises will not build in Pennsylvania themselves. But many rent capacity from colocation providers and cloud regions inside PJM's territory, including Northern Virginia, and the cost and timing of that capacity now depend more on how quickly providers can line up their own generation.
Speakers at AI Connect events have been warning about this physical constraint for some time. "A thousand watt GPU needs a thousand watts of cooling," Steve Heibein, Federal AI Chief Technologist at Hewlett Packard Enterprise, said during a AI Connect webinar on why AI is pushing data centers toward liquid cooling. Power availability, not GPU supply, is increasingly what sets the schedule.
Practical steps for CIOs and infrastructure leaders:
- Ask providers about power, not just space. Find out whether planned capacity has secured generation or would fall under PJM's curtailment rules after mid-2027.
- Price in pass-through costs. Rules that make data centers pay for grid upgrades and backstop procurement will show up in colocation and possibly cloud pricing.
- Revisit on-premises plans. "Hosting your own models is a really big investment," Jonathan Lounsbury, Principal Engineer at Alteryx, said in a AI Connect panel on self-hosted LLMs and vendor lock-in. Power rules make that investment harder to time, so compare it against packaged AI factory options and cloud capacity outside constrained regions.
The next markers to watch are FERC's response to PJM's request and how many Pennsylvania developers sign the state's consent agreements rather than walk away.
Frequently asked questions
What is Pennsylvania's GRID standard for data centers?
It requires developers to pay for the infrastructure they need, consult communities early, hire locally with community benefit agreements and meet strict environmental and water rules.
What did PJM propose for data centers?
New sites of 50 MW or more that lack their own generation or secured supply by June 1, 2027 would be curtailed before demand response programs during shortages. Existing sites are not affected.
How does this affect enterprises that don't build data centers?
Many rent colocation or cloud capacity in PJM's 13-state region, so power rules can affect the price and availability of that capacity.
Sources
- Office of the Governor of Pennsylvania: Governor Shapiro Signs Executive Order on Data Center Development in PA
- Commonwealth of Pennsylvania: Executive Order 2026-05: Protecting Pennsylvania Consumers from Data Center Impacts
- Axios Pittsburgh: Shapiro puts new guardrails on Pa. data centers
- Fox 29: Gov. Shapiro signs executive order putting guardrails on Pennsylvania data centers
- Bloomberg Law: Shapiro Signs Order With 'Strictest' Data Center Rules in US
- Tom's Hardware: New data centers on America's largest grid face first-in-line blackouts unless they bring their own power
- West Virginia Public Broadcasting: PJM proposes cutting energy for data centers that don't bring their own
Filed under: Data & AI Infrastructure, AI Governance & Trust
