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PA — State Policy Updated 2026-07-17

Pennsylvania

A. Data center-specific sales/use tax exemption B. 2026 GRID standards proposal for state support and tax... C. General economic development incentives that can apply... D. Project-specific incentives and state support A. Moratoriums, zoning restrictions, and local ordinances B. Environmental constraints Utility Regulation Water Constraints

1) Incentive programs (state + local)

A. Data center-specific sales/use tax exemption (statewide)

  • Program: The Computer Data Center Equipment Exemption Program exempts qualified computer data center equipment sold to, used, or consumed in a certified data center by an owner, operator, or qualified tenant from Pennsylvania sales and use tax. PA Department of Revenue, accessed 2026-07-17
  • Eligibility thresholds (must be met on or before the fourth anniversary of certification):
    • Investment + jobs: $75 million new investment and 25 new jobs if the data center is in a county with population <= 250,000; or $100 million new investment and 45 new jobs if the county population is > 250,000. PA Department of Revenue guidelines, 2025-09
    • Compensation: Annual compensation of at least $1,000,000 to employees at the site for each year of certification after the fourth anniversary. PA Department of Revenue guidelines, 2025-09
  • Qualification period: 25 full calendar years following the year the owner/operator filed the certification application. PA Department of Revenue guidelines, 2025-09
  • Sunset / certification limitation: The Department of Revenue may not certify any computer data center after December 31, 2032. 72 P.S. Section 9935-D, accessed 2026-06-10
  • Qualified tenants / load threshold: Tenants must have a valid occupancy agreement and commit to >=100 kW per month for two or more years; tenant exemptions can be renewed annually for up to 10 years, ending at the earlier of lease end or the 10th full calendar year after the occupancy agreement. PA Department of Revenue guidelines, 2025-09
  • Clean energy conditions in current statute/guidelines: The existing exemption statute and Department of Revenue guidelines do not list renewable energy or emissions-performance conditions; current eligibility focuses on investment, jobs, compensation, certification, and compliance. PA Department of Revenue guidelines, 2025-09
  • Exclusions: Telecommunications internal-use data centers without retail/wholesale customers, equipment used for electricity resale or >5% outside the center, proof-of-work crypto-asset mining, laptops/handhelds/motor vehicles used in and out of the center, and other excluded uses do not qualify. 72 P.S. Section 9931-D, accessed 2026-06-10; PA General Assembly SB 654 bill text, 2024

B. 2026 GRID standards proposal for state support and tax benefits

  • New administrative proposal: On May 27, 2026, Gov. Josh Shapiro released the Governor’s Responsible Infrastructure Development (GRID) Standards for data centers seeking Commonwealth support, including coordinated support through the Office of Transformation and Opportunity, faster permitting, and access to state tax incentives. Governor Shapiro press release, 2026-05-27
  • Four standards: GRID applications are evaluated across energy affordability, transparency/community engagement, workforce and economic development, and environmental protection. DCED GRID Standards page, accessed 2026-06-10
  • Energy affordability: GRID applicants must submit an energy plan, build/bring/buy incremental electric capacity needed for the project, pay the full cost of that capacity, pay project-caused interconnection/transmission/distribution/network-upgrade costs, and include escalating clean firm energy percentages up to 32% in 2035. Governor Shapiro press release, 2026-05-27
  • Transparency and footprint reporting: GRID applicants must provide community outreach plans, notify and consult local governments, hold public meetings, disclose permanent site occupants/end users, and report planned building size, campus acreage, peak demand, annual water consumption and source, non-emitting electricity share, PUE, and WUE. Governor Shapiro press release, 2026-05-27
  • Workforce/community thresholds: GRID certification would require at least $250 million in cumulative new investment, at least 200 prevailing-wage construction jobs, at least 50 jobs paying >=125% of Pennsylvania’s average statewide wage by the fourth anniversary of certification, and at least $1.5 million in annual site compensation after the fourth anniversary. Governor Shapiro press release, 2026-05-27
  • Environmental standards: GRID applicants must submit sustainability plans for limiting water and energy use, pursue recognized data-center efficiency/environmental certifications, limit backup-generator emissions, and add monitoring/mitigation commitments for projects in High Quality/Exceptional Value watersheds or Pennsylvania Climate Change Connectivity areas. Governor Shapiro press release, 2026-05-27
  • Codification bills advanced but were not enacted: HB 2650, which would replace certification for new data centers under the existing exemption with GRID certification while preserving benefits for already-certified centers, passed the House 134-68 on June 24 and was referred to Senate Finance on June 25; the Senate companion, SB 1384, was introduced and referred to Senate Finance on July 10. Neither was included in the enacted budget, so the existing Department of Revenue certification framework remains controlling law. PA General Assembly HB 2650, generated 2026-07-17; PA General Assembly SB 1384, generated 2026-07-17; Philadelphia Inquirer, 2026-07-13

C. General economic development incentives that can apply to data centers

These are not data-center-specific but can reduce state/local taxes or provide financing support for qualifying projects.

  • Keystone Opportunity Zones (KOZ/KOEZ/KOIZ): State and local tax abatements for businesses/residents in designated zones; relocating businesses must increase full-time employment by 20% in the first full year or make a 10% capital investment based on prior-year gross revenues. DCED KOZ program page, accessed 2026-06-10
  • Keystone Innovation Zone (KIZ) Tax Credit: For-profit businesses less than eight years old in targeted industries within a KIZ may claim credits based on KIZ-attributable gross revenue increases, subject to program limits. DCED KIZ program page, accessed 2026-06-10
  • Manufacturing and Investment Tax Credit: Requires a $1,000,000 annual taxable payroll increase from new full-time jobs; credit is up to 5% of the payroll increase and jobs must be maintained for five years. PA Department of Revenue tax credits page, accessed 2026-06-10
  • Tax Increment Financing (TIF) Guarantee Program: State credit enhancement for local TIF projects; maximum guarantee is $5 million per project. DCED TIF program page, accessed 2026-06-10

D. Project-specific incentives and state support

  • Amazon investment package (2025): The Commonwealth committed $10 million for workforce development tied to Amazon’s $20 billion Pennsylvania data-center investment and highlighted the data-center equipment sales tax exemption. Governor Shapiro press release, 2025-06-09
  • State support now conditioned by policy, not yet by enacted tax statute: The May 2026 GRID Standards are the administration’s current screen for Commonwealth support, but the tax-benefit amendments require legislation. Governor Shapiro press release, 2026-05-27

2) Restrictions, moratoriums, and environmental constraints

A. Moratoriums, zoning restrictions, and local ordinances

  • No statewide enacted moratorium as of July 17, 2026: SB 1359, which would impose a statewide hyperscale-data-center moratorium, remains in Senate Local Government. SB 1345, the alternative allowing municipalities to opt into a temporary moratorium, advanced through Senate Local Government and received second consideration on July 12 but was not finally passed; HB 2496, a separate 180-day municipal-pause bill, passed the House 201-1 and remains in Senate Rules and Executive Nominations after Senate Local Government amendments. None was included in Act 21 or the budget package. PA General Assembly SB 1359, generated 2026-07-17; PA General Assembly SB 1345, generated 2026-07-17; PA General Assembly HB 2496, generated 2026-07-17; Philadelphia Inquirer, 2026-07-13
  • State-local zoning framework: Pennsylvania’s Municipalities Planning Code delegates zoning authority to municipalities and allows conditional uses and special exceptions through local hearings and conditions. Pennsylvania Municipalities Planning Code, accessed 2026-06-10
  • Hazle Township (Luzerne County): On June 8, 2026, supervisors approved a 180-day curative-amendment/limited-moratorium process to pause zoning-validity challenges while the township drafts data-center rules; the action followed litigation over Project Hazelnut, a proposed 15-building campus on more than 1,200 acres. FOX56 WOLF, 2026-06-08
  • Muncy Township (Lycoming County): Supervisors adopted a nine-month data-center moratorium on April 30 to give the township time to draft zoning standards. Williamsport Sun-Gazette, 2026-05-01
  • Butler Township (Luzerne County): Supervisors adopted a municipal-curative resolution on May 12 after determining that the zoning ordinance did not address data centers, creating a 180-day amendment window and canceling a previously scheduled hearing on a proposed ordinance. Times Leader, 2026-05-12
  • Center and Adams Townships (Butler County): Center Township adopted a 180-day curative-amendment pause covering data centers and power plants on June 10; Adams Township adopted a 180-day moratorium covering data centers and five other high-impact uses on July 13. Butler Eagle, 2026-06-11; Butler Eagle, 2026-07-14
  • Lancaster Township (Butler County): At its July 13 workshop, supervisors placed a July 20 vote on the agenda to declare portions of the zoning ordinance invalid and begin a 30-day pause; because that vote falls after this file’s cutoff, it was proposed rather than enacted as of July 17. Cranberry Eagle, 2026-07-14
  • Franklin County: Commissioners adopted a county SALDO amendment on May 20, 2026 after February-April public review; the county says the amendment provides a model framework, noise limits, water-impact studies, electrical-service verification, environmental/community-impact analysis, and decommissioning financial security, but does not approve a project, create a new legal use, offer incentives, or override municipal authority. Franklin County, 2026-05-20
  • Londonderry Township (Dauphin County): The township states that its draft data-center ordinance and map were reviewed at a February 11, 2026 public hearing and adopted as Ordinance 2026-03. Londonderry Township, 2026-02-11
  • Susquehanna County: Ordinance 2026-03 amends the county SALDO to cover development, construction, operation, and decommissioning of data centers, including environmental/community-impact analysis and a definition that includes cryptocurrency mining, blockchain transaction processing, and server farms. Susquehanna County Ordinance 2026-03, 2026
  • Luzerne County: The county posted a proposed zoning amendment, version 4.0 as of May 1, 2026, for the 20 municipalities covered by county zoning; the county says no data-center proposals for county-zoned municipalities had been submitted, and the amendment would need Planning Commission and County Council action before adoption. Luzerne County, 2026-05-01
  • East Whiteland Township (Chester County): The township is drafting zoning text for data centers and energy generation, with a curative-amendment timeline that included March 31 and April 27, 2026 Board of Supervisors resolutions and a May 2026 public-comment process. East Whiteland Township, accessed 2026-06-10
  • Allentown: City Council enacted Bill 20 on June 17, adding data-center definitions and zoning standards; the ordinance does not retroactively govern the already-filed Emaus Avenue proposal. City of Allentown Legistar, 2026-06-17; LehighValleyNews.com, 2026-06-23
  • City of Lancaster: City Council adopted Lancaster’s first data-center zoning rules on July 14, limiting the use to 16 eligible parcels and requiring a special exception, public hearing, and technical reports. WGAL, 2026-07-15; City of Lancaster, accessed 2026-07-17
  • Earlier local examples still relevant: Jackson Township proposed adding “data storage center” as a conditional use in the industrial district; East Manchester Township noticed an Agricultural Innovation district with data centers as a permitted use; and Smithfield Township maintains a data-center criteria update page. Monroe County/Jackson Township public notice, 2025-07-21; East Manchester Township public notice, 2025-10; Smithfield Township, accessed 2026-06-10

B. Environmental constraints (water, noise, emissions)

  • Water withdrawal / consumptive use approvals:
    • SRBC regulates withdrawals >=100,000 gallons per day (30-day average) and consumptive use >=20,000 gallons per day in the Susquehanna basin. SRBC regulations summary, accessed 2026-06-10
    • DRBC review applies to water withdrawals >100,000 gallons per day (30-day average); in the Southeastern Pennsylvania Groundwater Protected Area, new/expanded withdrawals >10,000 gallons per day require a protected-area permit. DRBC project review page, accessed 2026-06-10
  • Energy and water reporting is now enacted: Act 21 of 2026 (SB 146) added Fiscal Code sections 1811-B through 1814-B. Beginning July 1, 2027, Pennsylvania data centers with peak demand of at least 10 MW must file annual energy- and water-consumption reports with DEP; DEP, in consultation with the PUC, must publish statewide trends, and noncompliance carries a $10,000-per-day civil penalty. The standalone HB 2150 remains in Senate committee, but its core reporting regime was incorporated into the enacted fiscal code. PA General Assembly SB 146 / Act 21 status, 2026-07-12; PA General Assembly Act 21 text, 2026-07-12; PA General Assembly HB 2150, generated 2026-07-17
  • State water-impact legislation also advanced: HB 2246 would address covered data centers in water-resources planning and was referred to Senate Environmental Resources and Energy on May 1, 2026 after House action. PA General Assembly HB 2246, generated/accessed 2026-06-10; Spotlight PA, 2026-05-18
  • Broader water-use bill introduced: HB 2682 would require every data center to report monthly energy and water use annually, register extraordinary water users, impose a water-resource fee, prohibit new withdrawals above one million gallons per day in critical water planning areas except under stated exceptions, and authorize audits and penalties; it was referred to House Environmental and Natural Resource Protection on June 30 and was not enacted. PA General Assembly HB 2682 text, 2026-06-29
  • Falls Township air-permit review: PA DEP disclosed that Amazon’s April permit application for the Bucks County campus proposes 280 natural-gas-fired generators and three diesel emergency generators; DEP held a July 14 community meeting and said the formal comment period would open July 18, one day after this update’s cutoff. PA DEP, 2026-07-13
  • Noise constraints remain primarily local: Philadelphia’s code limits some sound at protected-facility property boundaries, and PennFuture’s model data-center ordinance offers suggested provisions addressing noise and other local impacts. Philadelphia Code Section 10-403, accessed 2026-06-10; PennFuture, 2025-09-18
  • Air permitting: Large backup-generator fleets generally implicate PA DEP air permitting under 25 Pa. Code Chapter 127. PA Code Chapter 127, accessed 2026-06-10

3) Local governance and preemption

4) State utility and grid proceedings

  • PUC final large-load tariff framework: On May 13, 2026, the PA PUC released its Final Order in Docket M-2025-3054271 establishing a model tariff framework for large-load customers, including data centers, after an April 30 vote. PA PUC, 2026-05-13; PA PUC, 2026-04-30
  • Tariff thresholds and protections: The PUC framework applies to customers exceeding 50 MW individually or 100 MW in aggregate and includes cost-causation protections, deposits/collateral, interconnection-study timelines, public queue transparency, minimum contract/exit provisions, and customer self-construction options. PA PUC, 2026-05-13
  • Reconsideration withdrawn; docket remains active: On July 16 the PUC granted the Energy Association of Pennsylvania’s petition to withdraw its reconsideration/clarification petition, leaving the May model framework in place. The docket still shows active status and separately posted load-interconnection rulemaking questions on June 22, so utility implementation and related rulemaking remain live tracks. PA PUC July 16 Opinion and Order, 2026-07-16; PA PUC Docket M-2025-3054271, accessed 2026-07-17
  • PPL implemented a utility-specific large-load class: The PUC approved PPL Electric’s rate-case settlement on June 4, and LP-6 took effect July 1 for customers beginning service on or after October 1, 2025 with at least 50 MW at one facility or 75 MW aggregated among facilities served at 69 kV or above within ten miles, subject to a limited petition exception. The class requires a minimum ten-year commitment, upgrade security and exit protections, and an $11 million annual low-income-assistance allocation beginning in 2027. PPL Electric settlement, 2026-03-13; PPL Electric / SEC filing, 2026-06-04
  • PPL Sugarloaf transmission applications drew cost and siting scrutiny: In a May 7 protest, Pennsylvania’s Office of Consumer Advocate said PPL’s Sugarloaf-area applications (Dockets A-2026-3061547, A-2026-3061549, and P-2026-3061609) would serve the anticipated Hazle AI data center and other large loads. The identified first customer was projected to begin at 240 MW in 2028 and grow to 965 MW by 2033, while other requests in the area exceeded 5,000 MW by 2033. The OCA asked the PUC to scrutinize need, design, cost allocation, and environmental and health effects; the PUC also held June 30 public-input hearings on a related 1.1-mile, 230-kV Sugarloaf component at Docket A-2025-3059443. Pennsylvania Office of Consumer Advocate, 2026-05-07; PPL Electric Sugarloaf Project, accessed 2026-07-17
  • PJM forecast and PPL pipeline policy relevance: PJM’s 2026 Long-Term Load Forecast embeds data-center load growth adjustments in Pennsylvania zones including PECO and PL/PPL, while PPL’s advanced-stage Pennsylvania data-center pipeline was reported at 28.3 GW by 2034 in May 2026. PJM 2026 Load Report, 2026-01; Utility Dive, 2026-05-11
  • Federal large-load proceeding: FERC issued show-cause orders on June 18 requiring PJM and the other RTOs/ISOs to justify existing tariff treatment of large-load interconnections or propose reforms, opening Docket EL26-67-000 for PJM. FERC, 2026-06-18
  • PJM capacity auction underscored the supply gap: The July 14 auction for the 2028/2029 delivery year cleared at the $325/MW-day cap, procured 138,318 MW, and remained 6,831 MW below PJM’s reliability requirement; PJM said the forecast continued to add large data-center loads and described forthcoming Connect and Manage and backstop-procurement filings. PJM, 2026-07-14
  • Act 21 also changed transmission-siting review: For PUC transmission-siting applications and letters of notification, applicants must evaluate advanced transmission technologies such as dynamic line ratings, power-flow controllers, topology optimization, and high-performance conductors. The PUC may condition approval on their use and must specify assessment requirements within one year. PA General Assembly Act 21 text, 2026-07-12

5) Legislative activity (2024-2026)

Enacted

House-passed bills pending in the Senate or Senate committees

Other pending or newly introduced bills as of July 17, 2026

6) Notable projects and operators in Pennsylvania

  • Amazon (AWS) hyperscale campuses: $20 billion-plus investment for AI/cloud campuses; the state initially named Salem Township (Luzerne County) and Falls Township (Bucks County), with 1,250 permanent high-paying technology jobs and thousands of construction jobs planned. Governor Shapiro press release, 2025-06-09
  • AWS Falls Township permitting: The project moved into detailed air-permit review: Amazon’s April application proposes 280 natural-gas-fired generators and three diesel emergency generators, and DEP held a community meeting July 14 before a formal comment period scheduled to open July 18. PA DEP, 2026-07-13
  • QTS Salem Township campus: QTS announced a $580 million sustainable data-center campus after acquiring 96 parcels totaling about 1,700 acres in a land transaction reported above $500 million. On July 15, Salem Township supervisors approved road vacations and the project’s final master plan, but detailed land-development review was still expected to take roughly nine months; this was not final construction approval. Penn’s Northeast, 2026-03-25; Times Leader, 2026-07-15
  • Second Salem Township proposal: The 4-3 Group announced a separate $1.2 billion land deal on June 13 for another proposed Salem Township data-center project; public review and hearings were still prospective, so the announcement should not be treated as an approved investment. Times Leader, 2026-06-13
  • NorthPoint / Project Hazelnut (Hazle Township): Proposed 15-building data-center campus on more than 1,200 acres remains contested; after a court ruling that the project should go through a special-exception process and that the developer could challenge zoning validity, Hazle Township adopted a 180-day curative amendment on June 8, 2026. FOX56 WOLF, 2026-06-08
  • CoreWeave / Chirisa Technology Parks (Lancaster): The City of Lancaster says 216 Greenfield Road is in early construction and will be leased to CoreWeave; Phase 1 has begun, is expected to complete in summer 2027, and Phase 2 will require land-development review. City of Lancaster, accessed 2026-06-10
  • Talen / Montour County rezoning denial: Montour County commissioners unanimously denied Talen Energy’s request to rezone an 800-acre agricultural parcel for a data center and power station on February 10, 2026. Data Center Dynamics, 2026-02-16
  • Green Fig / East Whiteland: Green Fig withdrew its expanded 1.7 million-square-foot application in May, but the earlier plan remained viable after a Chester County judge quashed residents’ appeals on June 11. The township paused earth-disturbance work on July 2 for plan review; on July 9 supervisors tabled requested revisions that would shrink the complex to about 536,000 square feet and substitute air cooling for an approved system estimated to use more than three million gallons of water per day. Philadelphia Inquirer, 2026-06-11; Philadelphia Inquirer, 2026-07-02; Philadelphia Inquirer, 2026-07-09
  • Pennhurst / East Vincent Township: East Vincent supervisors rejected a conditional-use application for a proposed 590 MW AI data center at the Pennhurst State Hospital site on May 21, 2026. Patch, 2026-05-22
  • Archbald / Project Scott: Borough Council denied Archbald I LLC’s conditional-use application for an 18-building, roughly 400-acre campus on March 27; the developer appealed and asserted deemed approval in April, so the denial is under litigation rather than a final cancellation. Archbald Borough Council decision, 2026-03-27; Lackawanna County, 2026-04-24
  • Upper Macungie / Air Products site: The zoning hearing board denied Air Products’ request to treat a proposed three-building, 2.6-million-square-foot campus as a similar use in the light-industrial district after the May 27 hearing. Upper Macungie Township, 2026-07-10; Lehigh Valley Press, 2026-03-06
  • Columbia Borough / McGinness property: Council voted unanimously on May 26 to reject a $6.35 million bid for the borough-owned former airport property from a bidder associated with warehouse and data-center development after extensive public opposition. Columbia Spy, 2026-05-27
  • South Whitehall / Project Atlas: A pending plan proposes three 492,285-square-foot data-center buildings plus supporting structures on 410.65 acres, totaling about 1.56 million square feet; township review continued after the July meeting rather than producing an approval or denial by July 17. South Whitehall Township Planning Commission agenda, 2026-06-18; LehighValleyNews.com, 2026-07-07
  • Iron Mountain (WPA-1, Boyers): Operational underground colocation campus with 330,000 square feet and 15.5 MW available power. Iron Mountain facility page, accessed 2026-06-10
  • Expedient (Pittsburgh): Operates PIT1 and PIT2 data centers with published power and footprint specs. Expedient Pittsburgh data centers page, accessed 2026-06-10

Notes / data gaps to monitor