(The Center Square) – The rush to build data centers across Pennsylvania is producing uncertainty, confusion, or a lack of transparency in communities statewide, and even the big-picture question of how much data centers are driving electrical demand produces disagreement.
Question marks came up repeatedly on Friday during a hearing in Tioga County held by the Center for Rural Pennsylvania. After one presentation by the mid-Atlantic region’s power grid manager and another by the Data Center Coalition, center board member Sen. Judy Schwank said it sounded like two different stories as to how much data centers were driving demand.
Dan Diorio, vice president of the coalition, told Schwank increased manufacturing, electrification of vehicles and buildings, and emerging hydrogen production underscore that “data centers are not the only source of load growth on our system right now.” Stephen Bennett, a senior manager at grid operator PJM Interconnection, retorted, “They are predominant, by far” and added, “It is vastly biased towards load growth from the data center industry as opposed to the other causes that Mr. Diorio just indicated.”
The hearing came at a time many communities in Pennsylvania are under pressure to make decisions quickly on a little-understood topic.
Although some bills have passed the state House, Pennsylvania has no comprehensive regulations on data centers. Gov. Josh Shapiro laid out in his February budget proposal a set of expectations for big data center proposals.
That Shapiro concept for a set of rules, which he dubbed “Governor’s Responsible Infrastructure Development” or GRID, has not yet been put into bill form.
Asked this week whether the discussion of data center regulations should be separate from budget negotiations – which happen behind closed doors – Shapiro pointed to the divided Legislature. There, the Republican Senate majority is led by Sen. Joe Pittman of Indiana County, and the House Democratic majority is led by Rep. Matt Bradford of Montgomery County.
“Whether that is done separate from the budget process or with it; much of that will be up to Leader Pittman and Leader Bradford to decide. They control the flow of bills on their agenda,” Shapiro said. “What is important to me is that it gets to my desk so I can sign it into law and protect the good people of Pennsylvania.”
One bill that passed the House, sponsored by Democratic Rep. Robert Matzie of Beaver County, contained rules giving responsibilities to the state Public Utilty Commission. Another would have a state agency create a “model ordinance” to help municipalities deal with the data center boom.
At least a few lawmakers are talking about some form of moratorium on development.
On Friday, it was clear the industry is generating a need for speed in getting data centers built.
Diorio said the industry is “on a very steep demand curve right now” and is “trying to build out as quickly as it can.” Hence, he said, “time to market” – in other words, how long it will take to get it running – is a big consideration.
Communities are feeling pressure to decide quickly on complicated questions that could affect electricity, water use, property values, and quality of life, according to James Ladlee, a program leader at Penn State Extension.
“We have got to get some tools out there as quickly as possible, and some guidance,” Ladlee said. The “wave,” he said, has hit “really fast for everybody, including our township supervisors.”
Local meetings have become lengthy and demanding on proposals with “varying levels of project transparency,” Ladlee said.
Bennett said PJM understood AI and data center development are fundamental to national security, health care research, and other areas. At the same time, he said, development is occurring at a speed that is “foreign” to the utility industry and generative AI is creating electricity demand “like nothing we have ever seen before.”
Diorio said more than 18,000 jobs in Pennsylvania were tied directly to data centers in 2023. Beyond that, nearly 100,000 direct, indirect, or “induced” jobs overall were tied to data centers in Pennsylvania that year, he said.
He ticked off benefits produced by data centers including capital investment, tax revenue, high-wage jobs, and strengthening of the tech “ecosystem.” For a specific example, he cited a Mecklenburg County, Va., post-data center dynamic where the average taxpaying household was expected to see a $100 reduction in its tax bills over a single year.
