Governor Josh Shapiro signed Executive Order 2026-05 on August 18, 2026, titled “Protecting Pennsylvania Consumers from Data Center Impacts,” introducing sweeping new requirements for data centre development across the state.
The order creates two permitting tracks, with developers who execute a project-specific Consent Order and Agreement with the Pennsylvania Department of Environmental Protection gaining access to an expedited rolling review process.
Without executing the COA, the EO directs DEP not to begin reviewing any application until local approvals and required water and wastewater authorisations are fully complete and documented.
The 33-page COA is wide-ranging, establishing requirements related to energy procurement, community involvement, air emissions, water consumption, and ongoing compliance reporting obligations.
Developers must provide binding estimates of peak electric demand, future energy needs, primary and backup power sources, and water consumption figures at the point of executing the COA, often well before construction begins.
Once submitted, those figures become legally unchallengeable, with Paragraph 2 of the COA stating that developers “shall not challenge or deny the DEP’s assertion of the truth, accuracy, or validity of those findings in any matter between the developer and DEP.”
The COA requires developers to secure “Clean Firm Energy” from Pennsylvania-based resources, starting at 10 percent of annual electricity consumption from January 1, 2027, rising to 14.5 percent by 2030, and reaching 32 percent from January 1, 2035 onward.
Qualifying clean firm energy sources include nuclear, hydroelectric, geothermal, fuel cells, solar paired with storage, wind paired with storage, clean hydrogen, battery storage, and long-duration storage resources.
Developers who fail to meet minimum Clean Firm Energy obligations must make an Alternative Compliance Payment to the Pennsylvania Energy Development Authority, calculated as a shortfall payment based on the estimated average levelized cost of unsubsidised solar photovoltaic generation.
Penalties for noncompliance with energy-related provisions range from $25,000 to $100,000 per megawatt of the data centre’s rated capacity, per day, for each violation, with a flat $25,000 per day applying to other breaches.
These penalties operate automatically and without notice, and paying them does not relieve developers of their underlying obligations or prevent DEP from seeking further enforcement action.
The COA is structured to follow both the site and the project, meaning any tenant, owner, or operator taking an interest in the development must be bound to the same COA obligations as a successor or assign.
A developer’s own liability survives any transfer of the site, and DEP retains sole discretion over whether to modify or terminate a developer’s obligations following any such transaction.
An important carve-out exists under Addendum A for projects that, as of August 18, 2026, had both submitted a permit application to DEP and executed a binding Electric Service Agreement or Transmission Security Agreement, qualifying them for softened energy obligations.
Developers are advised to engage DEP as early as possible, execute the COA only when demand and capacity plans are as firm as possible, and be prepared to fulfil several obligations, including public information meeting schedules and a Pennsylvania workforce hiring plan, within 60 days of signing.