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Gov. Josh Shapiro said his latest executive order on data centers would protect Pennsylvanians from higher costs related to their development.
But even if new data centers bring their own power to build in Pennsylvania — one pillar of the governor’s standards — it may not lower electricity bills for the rest of us.
The effort could also raise costs in other areas if the power comes mostly from fossil fuels.
Environmental advocates and energy analysts said the executive action is a positive step, but they are calling on the General Assembly to do more.
Price pressures
The GRID standards call for data centers to shoulder the cost of new electric generation and grid infrastructure upgrades needed to power the projects, so households are not sharing those costs.
Costs have already been rising.
A recent report done for a solar power industry group by an outside firm found the average electricity price in Pennsylvania jumped 41% between 2021 and 2025. The analysis found most of that increase was due to a higher cost of generating electricity tied to natural gas prices, and higher costs to deliver electricity, as utilities invest in their infrastructure. The report said data centers were not a major factor in past bill increases, but could be in future raises.
The anticipated demand of data centers is putting pressure on the future cost of power, some of which gets paid up-front through a capacity market.
The GRID principles say data centers either need to build their own source of electricity or buy power from another source. It needs to be new generation, not taking away from what households are already relying on. The standards also require centers to use up to 32% firm clean energy by 2035.
Gas is the primary fuel used to generate electricity in Pennsylvania. Rob Altenburg, a Pennsylvania energy policy analyst, said gas is also what most developers are turning to as they seek to have their own source of power.
He said gas combustion turbines have been a popular choice for developers. Those are less efficient and more expensive to run than other types of power plants, such as a combined cycle plant that captures waste heat to generate more electricity.
It’s cheaper for data centers to be connected to the grid, Altenburg said, and then only use their turbine when grid prices are high. That could lower costs for the rest of us during times of peak demand, but raise prices all other times.
“From a lot of policymakers, you’re getting people acting like any bring-your-own-generation solves affordability, solves reliability, solves pollution issues,” Altenburg said, “and it doesn’t.”
- Opposition to data center construction is rising sharply, survey says
- Pa. Gov. Shapiro signs executive order to ‘rein in’ data center development
- Where Pennsylvania stands with regulating data centers
Increased pollution
Though gas burns cleaner than coal, it still produces planet-warming emissions. More gas getting burned means more pollution at a time when scientists say it’s critical to reduce emissions to avoid the worst effects of climate change. Those effects include drought, heat waves, and torrential storms and can negatively impact health.
Clean Air Council executive director Alex Bomstein said the emission reduction efforts included in GRID are weak.
“The biggest danger from AI data centers is the fossil fuels burned to power them,” Bomstein said. “The technology and industrial infrastructure exists today to power data centers with renewables and batteries alone.”
Researchers at Cornell University found that if AI computing centers grow at their current pace, that will create the same amount of climate pollution as adding 5 million to 10 million cars to U.S. roads by 2030.
A report from the Environmental Integrity Project said at least 74 gas-fired power plants planned to supply data centers across the U.S. could “release as much climate-warming pollution as the nation of Australia each year.”
Clean Air Council, PennFuture, and Sierra Club are challenging an air permit granted to the Homer City data center project, which includes a massive gas-fired power plant. They argue the developer failed to show that the benefits of the project outweigh the environmental and social costs.
PennFuture attorney Jessica O’Neill said, because there is no limit to the number of air quality permits state regulators can issue, and because permits are given on a site-by-site basis, the state could give out an infinite number of permits for plants to dump pollution into the air.
“We don’t have a cap on carbon emissions. We don’t have anything like that, and we don’t have a Department of Environmental Protection that can really consider those carbon emissions, I argue, when looking at this permitting,” O’Neill said.
Many proposed centers also plan to have diesel powered backup generators, which give off pollution that can cause respiratory illness and worsen heart and lung disease.
While backup generators would only be used for short durations, O’Neill said there could be scenarios in which the grid is strained on a hot day, making centers fire up the generators.
“So we’re probably already in an air quality emergency and we’re having this extra impact in the hotspot, in the local population near to these generators,” she said. “So we’re sort of compounding the impact of these emissions on these riskiest days.”
Mandatory standards?
Shapiro’s executive order could slow down state permits for data centers, but it can’t stop them completely or require that centers abide by his GRID standards.
The Department of Environmental Protection can’t add new conditions to a permit without a change in regulation or law. Under the order, DEP will hold off reviewing state permit applications until after a developer does one of two things: signs a binding agreement to follow the GRID standards or secures all local permits. In either case, final state permits won’t be issued until local conditions are met.
Developers can refuse to follow GRID and still get state permits; it just might take longer. Shapiro said that could deter speculative projects or bad actors.
Bomstein said there needs to be a statewide moratorium on AI data center development, so communities have time to decide how to govern the projects locally.
What can lawmakers do?
Environmental groups are pushing for passage of House Bill 1834. The measure passed the Democratically-controlled state House and is waiting for action in the Republican-controlled Senate.
Many of the GRID standards are shared in the bill, so, if it gets signed into law, those standards become mandatory for every commercial data center in the state.
Advocates said the bill has stronger environmental protections. Plus, it makes data centers pay into programs to help people overwhelmed by their energy bills, so it could have a bigger impact on affordability for some.
Another bill, H.B. 2496, would let local governments pause data center applications while they update zoning ordinances. It’s also waiting for a vote in the Senate.
