Key Points:

• Pennsylvania's GRID Standards establish voluntary guidelines for data center developers covering energy affordability, community engagement, workforce development and environmental protection.
• Voluntary compliance unlocks tangible benefits, including access to Pennsylvania's PA Permit Fast Track Program for streamlined permitting and potential tax incentives for computer data center equipment purchases.
• The standards respond to growing public concern about data center impacts, with 68% of Pennsylvanians opposing AI data center construction in their communities.

Gov. Josh Shapiro recently unveiled Pennsylvania's GRID (Growing Responsibly with Infrastructure and Data) Standards, a set of voluntary guidelines designed to promote responsible data center development across the state.

Administered through the Department of Community and Economic Development (DCED), the GRID Standards establish expectations for data center operators related to energy use, community engagement, workforce and economic development and environmental stewardship.

This alert provides an overview of the standards and highlights the practical benefits of voluntary compliance.

Background

As demand for data centers continues to surge — driven by artificial intelligence (AI) workloads, cloud computing and digital infrastructure needs — the state has issued the GRID Standards to encourage responsible development. The guidelines establish clear guardrails while also supporting economic growth through AI and technology infrastructure in Pennsylvania. To assist local governments and provide them with practical guidance, Pennsylvania has also issued a Data Center Toolkit.

Pennsylvania currently has approximately 131 active data centers, with approximately 50 more data centers proposed.[1] Pennsylvania currently has no fully operational hyperscale data centers, but more than 20 are reportedly in the early planning stages.[2] According to a recent poll, 68% of Pennsylvanians oppose the construction of an AI data center in their community.[3] The GRID standards are intended to encourage economic growth through data centers but in a responsible manner that will minimize the impact on local communities and rate payers.

Key Elements of the GRID Standards

The GRID Standards address several core areas of data center operations and development:

Energy Affordability. The standards encourage data center operators to support grid reliability by building, bringing or buying the incremental electric capacity needed to meet its new energy demands, and paying the full cost of that capacity. In addition, the GRID standards require the data center operator to source a certain percentage of the required energy from clean energy with the percentage increasing over time until 2035 when the data center is required to source 32% of its energy from non-emitting sources like nuclear, hydro, solar and wind.

Transparency and Community Engagement. The standards call on operators to engage meaningfully with host communities throughout the development process. This includes early outreach to local governments, school districts and residents; transparency regarding anticipated impacts such as noise, traffic and visual changes; and commitments to local hiring and workforce development. The project must include a footprint report that includes various details on the project.

Workforce and Economic Development. The standards require submission of a community benefit plan that details the project’s anticipated contributions to the local economy and workforce, including, but not limited to, a commitment to make at least $250 million of cumulative new investment; create at least 200 jobs during the construction phase of development; by the fourth anniversary of certification, create 50 new jobs each paying at least 125% of Pennsylvania’s average statewide wage and pay annual compensation of at least $1.5 million to employees at the data center; a hiring plan for recruiting and training local workers, including the use of registered apprenticeship programs and skilled construction labor; and a commitment to engage in good faith discussions with the local government to develop a community benefit agreement addressing various subjects such as noise and lighting, traffic, air quality and financial contributions towards local priorities.

Environmental Protection. The standards require operators to submit a sustainability plan demonstrating how the project will deploy leading technologies to limit water and energy consumption. The sustainability plan is required to demonstrate how the project will minimize local air pollutants by utilizing a backup energy system that relies on zero-emission energy storage (preferred) or backup generators that meet or exceed certain emissions standards, and operational practices to reduce emissions. For GRID projects located in certain sensitive areas, the developer is required to commit to engage in good faith efforts to collaborate with private conservation and public resource entities to support and fund the monitoring of impacts to land, water and biological resources.

Benefits of Voluntary Compliance

There are several benefits to voluntary compliance with the standards, including participation in the state's Office of Transformation and Opportunity’s (OTO) PA Permit Fast Track Program. The program streamlines permitting for high-impact economic development and infrastructure projects requiring permits from multiple state agencies.

A GRID Certificate would also provide access to certain tax incentives. As part of the GRID standards, the Shapiro Administration is asking the General Assembly to pass legislation amending Act 25 of 2021. If the change is applied as planned, developers would be required to secure GRID certification to be eligible for tax benefits for computer data center equipment purchases.

To demonstrate entitlement to the benefits available under the GRID Standards, project developers must submit a joint application to the OTO and Department of Revenue (DOR). Prior to commencing commercial operations, a GRID project must provide OTO and DOR a GRID Ready Report demonstrating compliance with the GRID Standards. Finally, in order to maintain its GRID Certificate after commencing operation, the GRID project must file annual reports demonstrating its continued compliance.

Conclusion

Governor Shapiro's GRID Standards offer a pragmatic, forward-looking framework for data center development in Pennsylvania. While voluntary, the standards carry meaningful practical benefits for operators willing to embrace them — from improved community relations to enhanced competitiveness for state incentives. We encourage clients involved in the development, investment or operation of data centers in Pennsylvania to evaluate the GRID Standards and consider how early adoption can support both business objectives and responsible growth.

For information, please contact Karen Davis at kdavis@foxrothschild.com or another member of the firm's Infrastructure & Development Practice Group.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the author(s) and not necessarily this law firm or its clients. Prior results do not guarantee a similar outcome.

[1] https://www.datacentermap.com/usa/pennsylvania/. Last visited June 9, 2026.

[2] https://www.spotlightpa.org/news/2026/03/data-center-boom-numbers-energy-grid-water-environment/. Last visited June 9, 2026.

[3] https://www.cityandstatepa.com/policy/2026/04/power-plays-battle-over-data-centers-pa/412554/. Last visited June 9, 2026.