{"id":258266,"date":"2026-08-03T13:17:09","date_gmt":"2026-08-03T13:17:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-pa\/258266\/"},"modified":"2026-08-03T13:17:09","modified_gmt":"2026-08-03T13:17:09","slug":"data-center-regulation-or-not-in-pennsylvania-part-1","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-pa\/258266\/","title":{"rendered":"Data Center Regulation (Or Not) in Pennsylvania: Part 1"},"content":{"rendered":"

The data center boom poses serious energy policy challenges. Narrowly<\/a>, they include how to reform markets and rules<\/a> to ensure that data center costs are not borne by electricity ratepayers<\/a>. In Pennsylvania, the average cost of electricity (a calculation that masks much higher regional variations) increased 14.6% over the past year, and the average electricity bill has increased 20.6% since 2024<\/a>. A record 387,000 households faced utility shutoffs in 2025<\/a>.<\/p>\n

The impact of data centers on the communities where they are built is no less important. State law<\/a> requires municipalities to zone for all legal purposes, including data centers, and they can\u2019t legally be banned. At this writing, there are 81<\/a> active data center development proposals in Pennsylvania. Counties and municipalities are scrambling<\/a> to pass moratoria or zoning amendments to deal with the onslaught, and community opposition is growing. So, too, is opposition to utilities\u2019 use of eminent domain<\/a> to build new transmission lines to serve them.<\/p>\n

Arizona<\/a>, Illinois, Ohio<\/a>, New York<\/a>, and Massachusetts<\/a> are pausing data center incentives or development to consider imposing some rules, and new rules may be coming in Texas<\/a>.<\/p>\n

Pennsylvania lags behind.<\/p>\n

There\u2019s been lots of performative<\/a> talk and voting<\/a> on bills that would have paused or put some controls on the explosion of data center development, but not one of them has passed.<\/p>\n

The House overwhelmingly voted<\/a> to repeal the state\u2019s open-ended state sales tax exemption for (very generously defined<\/a>) data center equipment, which is currently projected to cost the state at least $1.9 billion through 2031. That\u2019s in the face of a structural deficit<\/a> and a projected $5-billion operating deficit this year<\/a>.<\/p>\n

\"Bar\"Bar<\/a>Source: Pennsylvania Department of Revenue Bureau of Research<\/a><\/p>\n

The repeal legislation died in the Senate.<\/p>\n

The only data center legislation that was passed during this year\u2019s budget frenzy was an innocuous requirement tucked into the catch-all fiscal code<\/a> bill. It requires that data centers using more than 10 MW of electricity annually disclose their energy and water usage. The latter will, by definition, be significantly underreported, as it doesn\u2019t include water used at power plants that supply their electricity to data centers.<\/p>\n

For his part, Governor Shapiro proposed voluntary standards<\/a> for data centers. But they would have teeth only if they are legislatively tied to receipt of the sales tax exemption, which many legislators, in the House at least, want to repeal. Efforts to codify the Governor\u2019s proposal also failed before the legislature\u2019s summer recess.<\/p>\n

The Governor is now promising executive action<\/a>. What will that look like\u2014given his limited authority in this space? And will it make a difference? \u00a0<\/p>\n

Measures to reduce or eliminate the significant impact of data centers on electricity rates are urgently needed in Pennsylvania and the 12 other states in the PJM region<\/a>. In PJM\u2019s last four base capacity auctions, data center-driven capacity charges totaled $29.4 billion<\/a>\u2014almost half of the $63.6 billion in total capacity charges incurred in that period. PJM\u2019s inability to manage growing demand\u2014largely from data centers\u2014and deal with its chronic interconnection backlog<\/a> has prompted FERC to announce that it\u2019s poised to impose governance and stakeholder reforms\u00a0on PJM<\/a>.<\/p>\n

The on-the-ground impacts of hyperscale data centers in host communities have not received the same level of political attention as their impact on electricity prices.<\/p>\n

Hyperscale data centers change the character of communities. Lackawanna County, for example, is facing at least 11 major projects, with seven<\/a> of them proposed in Archbald Borough<\/a>, population 7,508. One of them, the\u00a0proposed Wildcat Ridge Data Center Campus<\/a>, would contain a whopping 588 backup diesel generators<\/a> to power 14 data center buildings.<\/p>\n

Many proposed projects are speculative, and municipalities don\u2019t always make good decisions<\/a>. But it\u2019s clear that the facilities that are built will have multiple, local, cumulative<\/a> impacts that state law and regulations do not adequately address.<\/p>\n

In part 2 of this post, I\u2019ll present a description of those local impacts and examine the Governor\u2019s GRID proposal<\/a>.<\/p>\n

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\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/a><\/p>\n

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\n\t\t\t\t\t\t\t\t\t\tJohn Quigley\t\t\t\t\t\t\t\t\t\t\t<\/a><\/p>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tSenior Fellow<\/p>\n

John Quigley is a senior fellow at the Kleinman Center and previously served on the Center\u2019s Advisory Board. He served as Secretary of the PA Department of Environmental Protection and of the PA Department of Conservation and Natural Resources.<\/p>\n","protected":false},"excerpt":{"rendered":"The data center boom poses serious energy policy challenges. Narrowly, they include how to reform markets and rules…\n","protected":false},"author":2,"featured_media":258267,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[28,30,29],"class_list":["post-258266","post","type-post","status-publish","format-standard","has-post-thumbnail","category-pennsylvania","tag-pennsylvania","tag-pennsylvania-headlines","tag-pennsylvania-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/258266","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/comments?post=258266"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/258266\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/258267"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=258266"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=258266"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=258266"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}