Pennsylvania tightens rules on AI data center power

Pennsylvania just made it harder to build a new AI data center in the state. Gov. Josh Shapiro signed an executive order Tuesday pulling every data center out of the state's fast-track permitting program. From now on, any developer who wants a permit needs two things first. Local community approval, and their own source of power.

Data centers use enormous amounts of electricity, more than almost any other kind of building. As AI companies race to build bigger ones, Pennsylvania residents worried that race was driving up their own power bills. Shapiro's order tries to shift that cost onto the companies. Any data center that skips the standard, lengthy review now has to bring its own power. It can't just draw more from the shared grid. Not every project loses out, though. Ones that follow the state's new voluntary standards, called GRID, still get preferential treatment in permitting.

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Will this actually slow down data center construction in Pennsylvania, or just relocate it? Developers who don't want to deal with local approval and their own power plants have an easy option. They could simply build in a neighboring state instead, one without these new rules. Other states are watching closely. Pennsylvania is one of the first states to directly link data center permits to their power source. If it works without scaring off investment, other governors facing the same complaints could copy it.