Pennsylvania Governor Josh Shapiro signed an executive order on Tuesday requiring large data centers in the state to bear the electricity grid costs associated with their power consumption, as well as disclose information on electricity and water usage.
As the proliferation of AI data centers continues rapidly, Pennsylvania faces the challenge of attracting technology investments while avoiding the escalation of electricity costs for other consumers due to large power users.
According to the executive order, data center developers are mandated to cover the costs of transmission, distribution, and other infrastructure required to provide electricity for their projects, and they are prohibited from passing these expenses on to regular households and other businesses.
The state government also tasked the Pennsylvania Public Utility Commission to study new electricity pricing and grid access rules, ensuring that large data centers bear the corresponding costs for their increased power demands.
In addition to electricity costs, data center developers must disclose their projected electricity and water usage, as well as the potential impact of their projects on local infrastructure.
Large data centers require substantial power to operate servers, and some facilities also utilize significant amounts of water for cooling purposes. The state government hopes that local authorities can have a clearer understanding of the impacts of projects on the electricity grid, water resources, and the community before approving them.
The executive order also mandates the state government to establish unified guidelines for data center site selection and approval, providing local governments with a reference when evaluating new projects.
The Pennsylvania government stated its intention to continue attracting artificial intelligence and data center investments for job creation and economic development opportunities. However, the additional infrastructure costs resulting from large-scale projects should be shouldered by developers and not shifted onto other electricity users.
Currently, developers have proposed over 100 data center projects in Pennsylvania, with 20 of them already submitted relevant permit applications to the state’s Department of Environmental Protection. Fourteen projects have progressed into more advanced development stages, with five of them having obtained the necessary permits but not yet operational.