Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05 on August 18th, directing agencies to apply strict GRID requirements to all data center proposals statewide, including projects affecting Philadelphia.
The shift could affect operating costs, permitting pace, and neighborhood impacts in Philadelphia.
Order Tightens Permitting and Shifts Cost Burdens to Developers
The order conditions DEP permit issuance on local approvals and binding commitments to GRID via consent orders, with developers barred from using nondisclosure agreements and removed from the fast-track permitting program.
It also aligns the sales and use tax exemption with GRID compliance and tasks the Special Counsel for Energy Affordability with pursuing PUC protocols so data centers cover reliability auction costs and drop service before other customers if the grid is strained.
Prior coverage has outlined the executive order establishing GRID-based permitting and local approval requirements.
Utility-Cost Exposure for Multifamily Operations
Requiring data centers to fund new generation, transmission, and distribution reduces the risk that grid buildout costs land on multifamily owners’ bills.
New forecasting and disclosure protocols aim to temper capacity-price swings that can filter into operating expenses.
As reported by WHYY, regional data center demand is driving most near-term load growth and has contributed to higher planning costs when projects do not materialize.
Local Approvals and Community Agreements Inside City Limits
Because DEP will not issue permits without municipal approval, Philadelphia’s zoning decisions and any negotiated community benefits agreements will determine whether large computing facilities proceed near residential corridors in the Northeast, River Wards, or South industrial districts.
Longer review cycles and required public meetings reduce the likelihood of abrupt construction near managed properties.
For additional context, see our report on criticism that the order stops short of a moratorium.
Environmental Reporting and Siting Considerations Near Rentals
Data centers must submit annual energy and water consumption data, follow strict water conservation standards, and disclose measures to protect the public from pollution, while DEP reviews potential new rules for large-scale operations.
These requirements increase transparency around air emissions from on-site generation or backup systems, which can shape siting decisions adjoining residential buildings.
We previously detailed requirements for data centers to bring their own power and DEP scrutiny of water and air impacts.
What Owners and Operators Should Watch Next
DEP’s public map tracks proposals and permit status, offering an early look at construction that could affect leasing velocity or maintenance logistics.
According to the state, more than 100 data center proposals exist, 58 have engaged with DEP, 15 have applied for at least one permit, and five have received all necessary permits for first-phase development.
The Department of Community and Economic Development will release best practices for zoning and community benefits, and the Department of Revenue will update tax-exemption guidance, changes that could influence timelines and neighborhood impacts tied to the full executive order and GRID permit process.