On August 18, 2026, Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05, “Protecting Pennsylvania Consumers from Data Center Impacts” (the “Executive Order”), which seeks to reset how Pennsylvania processes both environmental and local/municipal authorizations for large data centers with peak electric demand over 25 MW.
WHAT YOU NEED TO KNOW:
- For large data centers, evidence of municipal zoning and development approvals is first required before any environmental permits will be issued, and review of those permits requires either a Consent Order or prior issuance of all local and municipal authorizations.
- The Executive Order directs the state Office of Transformation and Opportunity to remove any existing data center project from the PA Permit Fast Track Program and rescinds their eligibility for the program, as well as barring confidential agreements between state agencies and data center developers/owners.
The Shapiro Administration characterizes the Executive Order as a response to what it describes as the proliferation of speculative data center proposals that, if built, would purportedly increase consumer energy costs and affect environmental resources “absent sufficient efforts to mitigate those impacts.”
Executive Order Ties PADEP Review of Data Center Permits to Consent Agreements
The Executive Order outlines two paths for the review of environmental permits for data centers. The administration is clear that the preferred path is when a data center signs a legally binding Consent Order and Agreement (“Consent Order”) first. Even then, while the Pennsylvania Department of Environmental Protection (“PADEP”) will review permit applications on a rolling basis, it will not issue permits until the developer demonstrates that the project is “consistent with the local comprehensive plan and that the project has received all local or municipal approvals under the applicable subdivision and zoning ordinance ….”
If a data center developer/owner does not sign a Consent Order, then PADEP will not review permit applications for the data center until the developer can demonstrate that the project has received “all local or municipal approvals,” among other requirements.
Both municipal zoning and development authorizations and environmental permitting processes can take multiple years, and often environmental permitting is a critical path item. The only way to expedite any part of the process under the Executive Order is to first enter into a Consent Order and then apply for permits. In short, if a data center does not enter into a Consent Order under the Executive Order, PADEP’s review of permit applications is paused, and environmental permit review and issuance will occur sequentially after “all local and municipal approvals,” and the municipality will not have the benefit of any input or review by PADEP in the meantime.
Template Consent Order Imposes GRID Requirements – Particularly Regarding Energy
The Executive Order directs PADEP to develop a template Consent Order and Agreement that incorporates the Governor’s Responsible Infrastructure Development (GRID) Requirements. The template is available online here. The GRID requirements impose significant energy-related obligations, including requirements that a developer procure sufficient incremental electric capacity to meet peak demand and incremental energy to meet its full energy demand on an annual basis. The Consent Order also establishes escalating “Clean Firm Energy” requirements (energy derived from renewable or battery energy storage systems)—10% beginning in 2027, 14.5% beginning in 2030, and 32% beginning in 2035—with alternative compliance payments available for shortfalls. The template also imposes extensive community, employment, environmental, and reporting commitments.
In practice, the Consent Order will be a negotiated document, where not all of the terms in the template will apply to every project. However, it would operate as an enforceable PADEP Order alongside the project’s environmental permits, and would impose significant stipulated civil penalties (ranging between $25,000 to $100,000 per day) for violations of the Consent Order.
Executive Order Does Not Apply to Previously Submitted Applications – But Pending Projects May Still be Implicated
The Executive Order applies only to data center permit applications submitted to PADEP after the Executive Order’s August 18, 2026, effective date. However, if a data center project with existing applications needs to submit an additional permit application after the August 18, 2026 date, the Executive Order will apply to those new applications. Because data center projects often require multiple PADEP permits, and those applications are not always submitted simultaneously, projects already in the PADEP queue may still need to assess the Executive Order’s implications for additional permit applications that have not yet been filed.
The Executive Order also removes any data center project with existing permit applications from the PA Permit Fast Track Program. Further, confidential agreements between any state agency and a data center developer/owner are now prohibited.
Executive Order Raises Legal and Practical Concerns
The Executive Order marks a dramatic shift in how environmental permit applications for data centers would be processed in Pennsylvania. In practice, this means municipalities would act first—perhaps without the benefit of understanding PADEP’s assessment of the project’s environmental impacts and how environmental permits may ultimately be conditioned. This sequencing raises broader questions under the Environmental Rights Amendment to the Pennsylvania Constitution: are the Commonwealth’s constitutional environmental responsibilities best served when its principal environmental permitting agency defers its review or issuance of permit conditions until after local decisions have been made?
Further, significant questions exist regarding the scope and enforceability of the Executive Order. For example, while not universal, certain permitting programs require PADEP to act on permit applications within a specific time period. If PADEP denies a permit application because it has not commenced any review under the terms of the Executive Order, would that denial constitute a lawful agency action, particularly where the Executive Order “shall not be construed to contravene or supersede any state or federal law”?
The sequencing requirements also have practical consequences beyond the permitting process itself. Although the Executive Order is purportedly aimed at distinguishing viable projects from speculative proposals, it may also effectively postpone preliminary site-development activities, such as site grading and tree removal. Further, the funding of large, investment intensive projects is often contingent upon issuance of key environmental permits, which will now be delayed. Finally, there is overlapping authority between municipal and PADEP regulation of certain aspects of any development, particularly stormwater management, which are normally addressed through review and communication between both the municipal engineer and PADEP staff. If the municipal requirements conflict with the ultimate permits issued by PADEP, then project delay will occur.
Data center developers/owners should consider the template Consent Order carefully while simultaneously working with their counsel and consultants to strategically map out the state and local permits and approvals they will need to apply for and when. The first project-specific agreements negotiated with PADEP may do more than govern individual projects. They could also help shape the agency’s expectations, negotiating positions, and approach to future agreements.
