On August 18, Governor Josh Shapiro signed an Executive Order (the Order) directing the Department of Environmental Protection (DEP) to only review permit applications if developers have executed a Consent Order with DEP to meet the Governor’s Responsible Infrastructure Development (GRID) Requirements and have received local approval. What does this mean for current and future data center developers in the Commonwealth?
More data center hurdles for developers
When we published “How to Navigate the Top 3 Challenges of Energy & Infrastructure Development Projects in PA” in spring of 2025, we highlighted the complexity developers face for projects like data centers. These still remain the top three challenges:
- Zoning and land use
- Permitting and interconnection
- Financing and tax opportunities
The Order codifies the connected nature and codependence of these challenges, which was already becoming an increasing reality as it was. It also creates two classes of data center applicants for DEP permits that have a peak demand of over 25 MW:
- Those that have met with DEP and executed a Consent Order and Agreement in which they agree to comply with the Governor’s GRID requirements that were announced on February 3, 2026, and May 7, 2026, and
- Those applicants that have not executed a Consent Order.
Thus, it essentially pushes all applicants to agree to comply with the GRID requirements, as projects that have not will face what are probably insurmountable hurdles in being approved.
Under the Order, the DEP is tasked with developing a template Consent Order and Agreement for any data center containing terms and conditions which ensure compliance with the GRID requirements. For developers with large-load data center plans, much more preparation will be required before submitting an application for approval. They should consider these three questions as a “pre-flight” checklist if they want to obtain a project greenlight in PA.
Can you gain local approval?
The Lehigh Valley especially has been a hot spot for community engagement surrounding data center developments, with swarms of concerned citizens attending and speaking out at public municipal meetings. Whereas we previously noted that coordination with, and understanding the concerns of, the local municipal officials is a vital aspect of obtaining approval, under the Order, the DEP now requires that data center development plans:
- Are consistent with the local comprehensive plan; AND
- Have received all required local/municipal approvals.
A site in a municipality with favorable zoning and a comprehensive plan aligned with the proposed use could potentially have a meaningful advantage over a technically attractive site where the land-use approvals are uncertain.
Local approvals and comprehensive plan consistency become a prerequisite to DEP’s permitting process for >25 MW data centers. For developers, this means local land use strategy needs to happen much earlier. Attorneys with experience in zoning and land use will be critical in this process, helping to:
- Evaluate the current state of land use regulations as it relates to a particular project
- Prepare zoning relief applications and/or zoning amendments
- Appear before local planning and zoning boards, and
- Review and negotiate documents associated with project approvals.
KEY TAKEAWAY: Large-load data center developers should consider local counsel with zoning experience to gain appropriate approvals needed for DEP permitting.
Can you get permitted (and how quickly)?
For applicants that want to execute a Consent Order, they must first have a pre-meeting to essentially discuss all aspects of the project and come up with the terms of the Consent Order. Thereafter DEP is to review applications on a rolling basis. Before issuing any permits, the applicant must provide documentation to DEP demonstrating that the project is consistent with local comprehensive plans and that the project has received all local or municipal approvals for the projects.
For applicants with a peak demand of over 25MW that have not executed a Consent Order, DEP will not begin reviewing applications for permits and authorizations until the applicant has provided documentation demonstrating that the project is consistent with the local comprehensive plan and that the project has received all municipal approvals. DEP will also:
- not review applications for permits or authorizations until the applicant has provided documentation that the project has received authorization for water withdrawal or wastewater discharge, and
- not issue permits or authorizations on a rolling basis.
TAKEAWAY: Essentially if you execute the Consent Order, it’s the normal process of concurrently seeking DEP permits while you seek local approvals. If you don’t, you can’t do any applications for DEP approvals.
Can you afford the PUC/PJM costs?
Interconnection isn’t simply a technical question anymore. Developers need to understand who pays for grid upgrades, reliability costs and other infrastructure associated with the load.
As noted in Infrastructure and Industrial Opportunities: Pennsylvania’s Next Development Cycle (the 2026 Chambers and Partners Doing Business in Pennsylvania Global Practice Guide),
“For large-load projects, power diligence is no longer a macro conversation about whether Pennsylvania produces enough electricity. It is a micro, site-specific inquiry: which utility serves the property, what load can be served, what upgrades are required, how long the studies will take and what commitments the customer must make before service is available…PJM Interconnection (PJM) co-ordinates the movement of electricity through all or parts of Pennsylvania, Delaware, Maryland, Ohio, nine other states and the District of Columbia. Its long-term forecast underscores the essential nature of power allocation, with its 2026 forecast projecting that summer peak demand in the PJM footprint could rise by roughly 85,000 MW over 15 years, to more than 241,000 MW. PJM has also been reviewing large-load requests more closely, in part to separate credible projects from duplicative or speculative load estimates. The demand is real, but not every announced data center or large-load project will be built.”
The Order directs the Governor’s Special Counsel for Energy Affordability to work with the Pennsylvania Public Utility Commission (PUC) on rules and orders intended to ensure that data centers bear more of the costs and reliability consequences associated with their electric demand. Specifically, it advocates for tariffs that would:
- charge appropriate data-center customers for PJM reliability backstop auction costs;
- prevent those costs from being shifted to non-data-center customers; and
- ensure data centers pay all Commission-jurisdictional interconnection costs incurred by utilities because of data-center development.
TAKEAWAY: The Order establishes a clear policy direction toward making data center developers responsible for the grid reliability and interconnection costs associated with their loads.
Other considerations
Other notable aspects of the Order include:
- The Office of Transformation and Opportunity is to remove any existing data center project from the PA Permit Fast Track Program;
- Data center projects are no longer eligible for the PA Permit Fast Track Program (even though that was part of the GRID program previously);
- The use of NDA’s in connection with data center projects is impermissible for all agencies under the Governor’s jurisdiction; and
- Data centers must submit an energy and water consumption report every year.
Next steps for Large-Load PA Data Center Developers
Projects like large-load data centers “do not move through one legal lane. A single development may involve real estate, land use, energy, environmental, tax, finance, construction, utility, incentives and eminent domain issues simultaneously. Treating those as separate workstreams can create gaps in timing and risk allocation.” The Order reinforces that reality and sharpens the consequences for any developer who fails to cover all the bases.
As Pennsylvania’s regulatory landscape continues to evolve, FLB helps developers understand what the changes mean for their projects, from today’s requirements to new Orders and regulations as they take shape. Connect with our Energy & Infrastructure team today!
