What Environmental and Energy Factors Should Pennsylvania Data Center Developers Consider Before Choosing a Site?
Executive Order 2026-05 establishes two permitting paths for data center projects with peak demand exceeding 25 megawatts. A developer that elects to comply with the Governor’s Responsible Infrastructure Development, or GRID, Requirements must notify the Pennsylvania Department of Environmental Protection (“DEP”) of the proposed project, participate in a pre-application meeting, and execute a project-specific Consent Order and Agreement. After those steps are completed, DEP may review qualifying permit and authorization applications on a rolling basis. The process may be useful to a developer seeking to coordinate multiple approvals, but it does not eliminate any substantive permit requirement. To the extent permitted by law, qualifying permits must incorporate the GRID Requirements as enforceable conditions. The foregoing is significant because Executive Order 2026-05 provides that the Office of Transformation and Opportunity is to remove any existing data center project from the PA Permit Fast Track Program, which was established under Executive Order 2024-04, PA Permit Fast Track Program, and data center projects are no longer be eligible for the PA Permit Fast Track Program.
A developer that does not execute a Consent Order and Agreement is subject to a more sequential review. DEP may not begin reviewing the project until the applicant demonstrates consistency with the applicable local comprehensive plan, receipt of all required municipal approvals, and any required authorization for water withdrawal or wastewater discharge. DEP also will not issue permits on a rolling basis and must wait until all necessary applications have been submitted and reviewed. For a project that is still in site selection or preliminary design, the choice between these two paths may warrant early consideration because it can affect the development schedule, permit strategy, financing milestones, and the terms of any site-control or acquisition agreement.
If my project satisfies local zoning, can I move forward with state permitting?
Local zoning and subdivision approvals remain essential, but they are only one component of project feasibility. The Executive Order requires documentation that the project is consistent with the applicable comprehensive plan and has received all required local or municipal approvals before qualifying DEP permits or authorizations may be issued. If the data center or its supporting infrastructure extends into more than one municipality or county, the developer may need to satisfy the ordinances and approval requirements of each affected jurisdiction.
For a developer, the practical issue is how to advance land use, environmental, utility, and infrastructure workstreams without assuming that success in one will assure success in the others. A zoning approval may establish that a data center is permitted at the site, but it does not establish that adequate electric capacity or water supply will be available, that withdrawal or discharge approvals can be obtained, or that the proposed cooling and backup-generation systems will meet applicable requirements. These interdependent approvals may affect the timing and structure of site-control agreements, acquisition agreements, financing documents, and development schedules.
What water and cooling questions should I be prepared to answer?
A proposed closed-loop cooling system does not, by itself, resolve the project’s water-supply and wastewater issues. Issues commonly evaluated during site selection and preliminary engineering include the volume and source of the initial system fill, anticipated makeup-water requirements, the frequency and volume of blowdown or other discharges, proposed treatment methods, and the destination of wastewater generated by the system. The analysis may address whether the supply will consist of groundwater, surface water, potable water from a public water system, reclaimed water, mine or quarry water, or another non-potable source. It may also identify approvals that could be required from DEP, a river basin commission, a public water supplier, a sewer authority, or another governmental entity.
The Executive Order also requires operating data centers to submit annual reports beginning July 1, 2027, identifying total water consumption, maximum-day demand, the source of the water, and the purpose for which it was used. If a permitted public water system supplies the facility, the report must identify that system and the associated agreements. For a new facility, those future obligations may inform project planning, including the development of a quantifiable water budget, evaluation of whether the proposed supplier can meet projected demand, and consideration of systems capable of tracking the required information once operations begin.
What energy and environmental impacts should be evaluated before selecting a site?
The energy analysis may extend beyond confirmation that an electric utility will process an interconnection request. Issues commonly evaluated during site selection include the facility’s projected peak and average load, the availability and timing of incremental generation or capacity, the transmission and distribution improvements required to serve the project, responsibility for interconnection and reliability costs, and the circumstances under which the facility may be curtailed during a pre-emergency or emergency event. These issues can materially affect site viability, construction timing, operating costs, and the ability to satisfy financing or power-delivery milestones. The Executive Order directs the Governor’s Special Counsel for Energy Affordability to advocate for tariffs and procedures intended to allocate data-center-related interconnection and reliability costs to the applicable data center rather than other ratepayers. In view of the foregoing issues, developers should now consider the possible use of geothermal energy for both cooling and electricity generation.
Environmental due diligence often considers the data center and its supporting infrastructure as a single, integrated project. Depending on the site and design, relevant issues may include air permitting for backup generators, cumulative emissions from multiple generators, noise from cooling and electrical equipment, stormwater management, wetlands and waterways, threatened or endangered species, transmission corridors, electromagnetic fields, wastewater disposal, and the effects of utility improvements on adjacent properties. A brownfield or previously developed site may offer land use and infrastructure advantages, but it may also present soil, groundwater, remediation, or institutional-control issues that affect acquisition, construction, and long-term operation.
Executive Order 2026-05 does not prohibit data center development. It does, however, place greater emphasis on whether the selected site can support the project’s land use, power, water, environmental, and infrastructure requirements without shifting unreasonable costs or impacts to ratepayers or the surrounding community. The Executive Order highlights the interconnected nature of these considerations for developers evaluating or advancing a Pennsylvania site. Early coordination among land use and environmental counsel, engineers, utilities, consultants, municipal officials, and state agencies can help identify potential obstacles before substantial capital is committed and may contribute to a more informed approach to permitting, construction, and operation. Notably, the foregoing, evaluating is critical before a developer enters into a Consent Order and Agreement with the DEP.
For questions about Executive Order 2026-05 or legal considerations affecting proposed data center projects in Pennsylvania, contact Norris McLaughlin, P.A. attorney John F. Lushis, Jr., Esq. at jlushis@norris-law.com.