HARRISBURG — Despite a flurry of proposals to regulate data centers in the months leading up to this year’s state budget deadline, Pennsylvania lawmakers passed only one related measure as part of the $50.8 billion deal.
It mandates that data centers using more than 10 MW of electricity annually disclose their energy and water usage. Environmental advocates said the change, which covers most of the new data centers planned for the state, is positive but not especially meaningful.
Lawmakers left in place an increasingly unpopular sales tax exemption for data centers that is projected to cost the state $2 billion in tax revenue by mid-2031, and passed no other bills that would regulate the burgeoning industry.
This is despite the state House and Senate passing a bevy of recent bills seeking to rein in data centers, such as one that would ban developers from accessing a program that gives tax breaks to those who invest in certain “opportunity zone” areas, and another to allow local governments to temporarily pause development.
The measures came after polling this spring showed that 64% of Pennsylvanians saw data centers as a problem, and communities increasingly rallied against them.
However, none of these pieces of legislation made it to the governor’s desk.
State House Majority Leader Matt Bradford (D., Montgomery) placed the blame squarely on his Senate counterpart Joe Pittman, saying that he was “disappointed” that the Indiana County Republican had “no interest in moving data center regulation legislation.”
“We are willing to have a comprehensive discussion. We desperately need the Senate to come forward and work with us in a bipartisan way to get that accomplished,” Bradford said in an interview with PCN.
A spokesperson for Democratic Gov. Josh Shapiro also laid the blame at the feet of state Senate Republicans, saying that they “failed to act” on his plan to incentivize data centers to meet environmental and energy standards.
Shapiro’s plan would make Pennsylvania’s data center tax credit — the same one many lawmakers support axing — contingent on developers being more transparent and reducing environmental impacts, among other things. The spokesperson did not respond to Spotlight PA’s questions about whether the administration hopes to pass that plan and other guardrails this fall.
Pittman said state Senate Republicans “are open to further discussions, including considering measures to allow for moratorium decisions to be made at the local level,” but did not specify if his caucus would take up the issue in the fall.
“Not surprisingly, Matt has chosen to mischaracterize my position instead of engaging in work to reach a meaningful consensus,” Pittman said in a statement to Spotlight PA. “We believe transparency is important, which is why we took a step forward on that front as part of the budget passed by the Senate - which Matt must have either forgotten about or chose to ignore.”
Environmental advocates told Spotlight PA they hope the legislature will again take up some of the data center regulation bills when they are scheduled to return to the Capitol in September.
“It is time for them to stop kicking the can down the road and pass comprehensive data center legislation,” Tom Schuster, director of the Sierra Club’s Pennsylvania chapter, said in a statement. “Half-measures and reporting requirements are not a substitute for real policy.”
Specifically, advocates have pushed lawmakers to pass a bill sponsored by state Rep. Rob Matzie (D., Beaver) that would create regulations governing how data centers interact with utilities. It would mandate centers pay for the construction of utilities’ distribution infrastructure and establish early termination fees for data centers that pull out of their contracts with utility providers.
It would also prohibit utilities from passing on costs associated with data centers to ratepayers; mandate that data centers get roughly a third of their energy from clean sources such as nuclear, hydroelectric, and solar; and direct data centers to pay into state programs that help low-income Pennsylvanians with heating or cooling bills.
Rob Bair, president of the Pennsylvania State Building and Construction Trades Council, said he supports some regulations, like Matzie’s bill and Shapiro’s incentive program, but warned that other proposals, like a moratorium on data center development, could unnecessarily stymie economic growth.
Bair said such actions could “make yourself feel good” in the short term, but ultimately be detrimental.
“A talking point and a soundbite is great, but if you do it today, what's the ramifications next week, next month, next year, five years down the road?” Bair asked.
Katie Blume, legislative director of Conservation Voters of Pennsylvania, said that while she is frustrated the legislature hasn’t passed substantive data center regulations, other proposals, like repealing the tax break expected to cost Pennsylvania around $2 billion, would be “the bare minimum.”
“We're not looking at things from a tax standpoint. We want to protect the environment. We want clean energy. We want consumers to be protected, and repealing a sales tax does none of that,” Blume told Spotlight PA.