Pennsylvania will not issue a data center permit until the required local approvals are in, and a developer that has not signed up to the GRID Requirements does not get its review started until those approvals are in

What the order actually does

Executive Order 2026-05 directs the Department of Environmental Protection to incorporate the GRID Requirements into its permit review process for all data center proposals. A developer that wants the normal review path must attend a pre-application meeting with DEP and execute a Consent Order and Agreement containing a binding commitment to follow the GRID Requirements, with penalties for failure to follow through. The administration has published a template COA.

For those projects the release says DEP will continue to review qualifying permits as the applications are submitted and found to be compliant under Pennsylvania law. One change applies regardless: in the release's words, "as a change from current practice, DEP will not issue any permit unless the project has received all required local approvals."

For a developer that does not agree to the GRID Requirements, the release states that DEP will not begin review of permit applications until after all required local approvals are secured and every permit application required for construction has been reviewed and found compliant. That defers the review rather than refusing the project.

Alongside that, the Department of Revenue will update the Computer Data Center Equipment Exemption Program guidelines so that applicants for the sales and use tax exemption must also comply with the GRID Requirements. The release states that applicants who do not meet the GRID Requirements will not receive the existing tax exemption.

The four GRID Requirements, as the state states them

The release sets out four obligations a developer must accept. First, pay the full cost of new electricity generation, transmission, distribution and other infrastructure needed to power the project without shifting costs to Pennsylvania households and businesses. Second, commit to open, transparent engagement with local residents and leaders, including notification to impacted local governments, public meetings and consultation early enough to allow meaningful public input on major design decisions.

Third, hire and train local workers and enter into meaningful community benefit agreements. Fourth, meet the highest standards for environmental protection, including strict water conservation requirements.

Two further provisions sit outside that list. Data center proposals, described by the release both as AI data center projects and as all data center proposals, are removed from the PA Permit Fast Track Program administered by the Office of Transformation and Opportunity, and will not be considered for it in future. And the release states that the use of nondisclosure agreements with data center projects is not permissible.

One wording point we do not resolve. The release describes the Fast Track removal twice as covering AI data center projects, and once, in its itemised list of what the order does, as covering all data center proposals. We have not opened the executed order, so we report the removal without asserting which of those two scopes the order text carries.

The disclosure and grid provisions

Operators will be required to submit energy and water consumption information to DEP. The categories named are total energy consumption and total natural gas consumption for the previous calendar year, estimated average energy usage per hour during the data center's peak, total water consumption for the previous calendar year with the maximum day demand, and any measures taken to protect the environment and the public from polluted water or air.

The administration has also published a map of all proposed data center projects in Pennsylvania that have engaged with DEP, with permit status tracked as DEP reviews them.

On the grid side the order directs the Special Counsel for Energy Affordability to engage with the Public Utility Commission on three specific things: protocols so that data centers lose electric service before other customers if the grid is stressed, procedures for utilities to charge data centers rather than other customers for the cost of the reliability backstop auctions PJM runs to secure new generation for data center demand, and protocols for accurate forecasting and transparent disclosure of data center electricity demand.

The numbers the state gives for the problem

The release quantifies the pipeline. In the last year DEP has become aware of over 100 data center projects reported in publicly sourced databases, with 58 projects engaged with DEP to discuss permitting at some level of formality. Of those, 15 have applied for at least one DEP permit, and only five have received all necessary permits required for their first phase of development.

The administration's framing is that much of the pipeline is speculative, and the release presents the order as a way to weed out speculative proposals. The distance between 58 projects in discussion and five fully permitted is our own reading of why those figures appear in the release, not a claim the release makes about them.

What Pennsylvania says and what a reader should take from it

Governor Shapiro's own framing was direct: "My message to data center developers is clear: if you can't agree to our strict requirements and get the community where you want to build to say 'yes,' you're not going to have the Commonwealth's support either. These are some of the biggest companies in the world, they can afford to be good neighbors, follow the rules, and do this right."

The release also situates the order politically. It states that while the House has advanced legislation to codify the GRID Requirements, Senate Republican leaders have refused to take action, and that the Governor is using available executive authority in the meantime. The release itself says the Governor will continue to call on the General Assembly to enact comprehensive, enforceable standards, which we read as the state treating the executive route as the available one rather than the complete one.

For counsel advising a developer, the practical point is sequence. On the release's account a permit cannot issue until the required local approvals are in, so the local process now sits upstream of the state one rather than beside it, and on the release's account the Commonwealth will not permit a nondisclosure agreement on a data center project, so that route to keeping a project quiet is closed on the state side.

What we did not verify

We opened the Governor's Office release of 18 August 2026 in full and took every figure, requirement and quotation from it. We did not open the executed Executive Order PDF, the template Consent Order and Agreement, or the DEP permit tracker map, and we do not assert anything that appears only in those documents.

In particular we do not state what penalties the template COA carries, beyond the release's statement that it contains penalties for failure to follow through. We also make no claim about how DEP will treat an application already in the queue on 18 August 2026. The release says the new process applies to all new permit applications going forward, and is silent on pending ones.

We make no prediction about legal challenge. Nothing on this record tells us whether the order will be contested, and we do not assess whether it would survive.

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