Pennsylvania Gov. Josh Shapiro said the state should play a leading role in the development of AI and data centers but proposed a list of requirements to get through what he described as a “selective” process.
“I know Pennsylvanians have real concerns about these data centers and the impact they could have on our communities, our utility bills, and our environment,” Shapiro said Tuesday during his annual budget address in Harrisburg. “And so do I.”
But Shapiro said the U.S. needs to develop these facilities or risk control by “communist China.” Energy-hungry data centers run computer servers that generate internet services and artificial intelligence. Proponents, like Shapiro, tout increased tax revenue and job creation.
But the growth of data centers has caused increased air pollution and water scarcity locally, and led to rising electricity prices for consumers throughout the country. The region’s grid operator, PJM Interconnection, said data centers have led to a narrowing gap between supply and demand, which has led to increasing costs. The amount of energy required by new and proposed data centers also risks future blackouts.
Shapiro said Pennsylvania is the second-largest energy producer in the country, having generated 240 million megawatts last year. This, along with the state’s higher education resources, makes it poised to house more facilities.
“We have leading researchers in AI and machine learning at Penn State, CMU, and Penn and elsewhere,” Shapiro said. “We have the talent and we’re already investing in the workforce needed to build, maintain, and operate these facilities.”
To address the widespread pushback on data centers from local communities, consumer advocates and environmentalists, Shapiro announced the creation of the Governor’s Responsible Infrastructure Development standards — or GRID.
Along with hiring local residents, he wants data center developers to generate their own power or pay for the additional draw on the grid. Without giving details, he said there would be “strict transparency standards and direct community engagement,” along with environmental protection and water conservation. “If companies adhere to these principles, they will unlock benefits from the Commonwealth, including speed and certainty in permitting and available tax credits.”
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Environmentalists push back on Shapiro’s data center plan
Environmentalists responded warily to the new proposal.
Shapiro and lawmakers are trying to have their cake and eat it too, said David Masur, PennEnvironment executive director. He said they “want to tap into this whole growing business” and yet show “we hear the concerns from local residents and others about what data centers may bring to communities around Pennsylvania and to our environment.”
Masur said there’s growing bipartisan opposition to data centers including Democrats worried about affordability, increased greenhouse gas emissions if the facilities use fossil fuels, and environmental impacts. Conservatives who live in areas impacted by the data centers are also facing rising electricity prices.
“Naming affordability and data centers as priorities in the same breath is outlandishly paradoxical,” said Food & Water Watch director Megan McDonough in a statement. “The two cannot exist together, no matter how hard Shapiro tries to spin the benefits of Big Tech’s power grab.”
While Shapiro spoke about ways to cut electricity prices and reform the Pennsylvania Public Utility Commission’s oversight of utilities, he made no other mention of environmental issues or the regulatory bodies that oversee the environment.
The budget proposal increases funds for the Department of Environmental Protection by $15.8 million for staff to handle permit reforms and includes an additional $18 million for plugging abandoned wells. Republicans criticized the budget proposal generally for relying on the state’s Rainy Day Fund.
“Specifically, this proposal would take over $4.6 billion out of the Rainy Day Fund, which would be over half of what currently exists in the fund,” said Rep. Bryan Cutler, R-Peach Bottom. “This is dangerous and puts Pennsylvania at risk in a potential financial emergency.”
