Pennsylvania has announced new standards aimed at establishing guardrails and accountability for data center developments in the state.

The Governor’s Responsible Infrastructure Development (GRID) Standards, announced by Pennsylvania governor Josh Shapiro yesterday (May 27), establish “strict standards” that data centers must comply with to receive support from the state.

This includes ensuring large scale infrastructure projects are developed “responsibly” and protect Pennsylvania ratepayers, as well as provisions on workforce and economic development, environmental protection, transparency, and community engagement.

Under the standards, developers will be required to pay entirely for their own energy needs, meet state environmental requirements, create local jobs, and “deliver millions in additional tax revenue,” according to state government officials.

For developers, the standards will set expectations for seeking support in Pennsylvania, including coordinated project support through the state’s Office of Transformation and Opportunity (OTO), as well as certainty in permitting, and access to state tax incentives.

The standards were developed with input from local leaders, organized labor, industry, and environmental stakeholders.

Submissions through the OTO will require developers to outline how they meet the GRID Standards. If an application meets the requirements, the project will be granted GRID certification and become eligible for OTO’s fast track program, a streamlined permitting route for “high-impact economic development and infrastructure projects requiring permits from multiple Commonwealth agencies.”

As part of the new standards, the Shapiro administration has asked the state General Assembly to amend the current sales and tax exemption for the Computer Data Center Equipment Exemption Program, which currently offers an exemption from sales tax when computer data center equipment is sold to, used, or consumed in a data center by an owner, operator or qualified tenant.

Under the new legislation, developers will need a GRID certification for tax benefits on computer data center equipment purchases.The administration said, if left unchanged, the current sales and use tax exemption could cost the state more than $517 million annually by 2030.

The Shapiro administration is now looking to introduce legislation into the General Assembly that will codify the GRID standards into law.

As part of this announcement, the Shapiro administration said it was also rolling out a new “local government toolkit” to assist municipalities with navigating and making decisions on data center proposals.

The toolkit will offer guidance on zoning, infrastructure capacity, resource use, fiscal impacts, and community benefits.

“As Pennsylvania continues to compete for major economic development projects and lead on innovation, we have a responsibility to set strict accountability standards and ensure these projects create real opportunity for our communities,” said Governor Shapiro.

“I’ve heard directly from Pennsylvanians who are concerned about the impact data center development could have on their communities, the environment, and their utility bills. That’s why I am putting clear guardrails in place to hold developers accountable to protect consumers, strengthen communities, and put Pennsylvanians first. If companies want the Commonwealth’s full support – they must meet strong standards on energy affordability, clean energy generation, transparency, workforce development, community impact, and environmental protection. This is about setting a higher bar for projects and ensuring development happens responsibly and in a way that benefits Pennsylvanians.”