Pennsylvania Governor Josh Shapiro has recently implemented stringent new regulations on data centers within the state. This executive order, issued on August 18, aims to control the rapid development of data centers, driven largely by the growth of artificial intelligence. The regulations require data center developers to obtain local approval for projects, adhere to water conservation standards, and cover the costs of increased electricity usage, including supplying their own power generation. Developers are also removed from fast-track permitting programs and must engage in transparent communication with communities, prohibiting non-disclosure agreements.
While the executive order does not directly target the natural gas industry, a trade group representing gas firms views these new restrictions as a potential threat. The rationale behind this concern is that data centers often require significant energy, and a portion of this demand could potentially be met by natural gas-fired power plants. By making data center development more challenging, the new regulations could indirectly reduce demand for natural gas in the state.
Governor Shapiro’s move is a response to increasing local opposition to data center development and concerns about their impact on communities, resources, and infrastructure. He stated that "too many" data center developers do not prioritize the communities where they build. The Pennsylvania Public Utility Commission (PUC) is also examining the impact of data centers on electric reliability and consumer costs, which further underscores the state's comprehensive approach to managing this rapid growth.
Critics of the new regulations, such as the Data Center Coalition, argue that such "one-size-fits-all policies" could stifle investment and job creation. They emphasize that the industry is committed to compliance and accountability. However, Shapiro maintains that these are the "strictest guardrails in the nation" and are necessary to protect communities and ensure responsible development, particularly given the wealth of the companies involved and the potential for negative local impacts without proper oversight.
