Data Center Legislative Debrief

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Article posted by Annie Regan, Senior Director of Campaigns

Overview:

Data centers pose unique challenges to every level of government here in Pennsylvania. While every new industry brings new concerns, data center facilities are unconstrained by traditional economic factors and can be built at a speed that cannot be matched by decisionmakers. Data centers pose numerous challenges for local communities, from poor siting and local air and noise pollution, to high water usage and grid-scale power impacts.

While PennFuture is working at the local, regional, and statewide level to address these impacts, the basic fact remains that our current laws are ill-equipped to protect Pennsylvanians.

Therefore, PennFuture has called for a statewide moratorium —or pause— on data center development until state lawmakers can adopt strict policies that ensure data centers are sited properly, have regulated water usage, and bring their own clean energy. It’s critical that Pennsylvania sets guardrails in place before a surge of data centers are built so that our electricity grid can be maintained, ratepayer impacts are constrained, and our air, water, and climate pollution problems don’t get worse.

But there is good news! Some state legislators have put forward several bills in response to the needs of municipalities to protect communities and to the concerns regarding energy prices and resource consumption.

As we analyze each data center bill put forward, PennFuture lays out these core principles that legislators must incorporate.

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PennFuture’s Data Center Principles include state policies that:

  1. Provide meaningful protection of our public natural resources and our constitutional right to clean air and pure water as provided under Article I, Section 27 of the Pennsylvania state Constitution.
  2. Ensure that existing utility customers are not subsidizing costs associated with data center buildout.
  3. Require facilities to demonstrate that they have secured the necessary power to support their operations before these facilities are connected to the grid.
  4. Promote the development of new, clean energy sources to increase grid reliability and lower electricity costs for Pennsylvanians.

But let us make ourselves clear: Until lawmakers enact policies that achieve these four principles, data center development shouldn’t be allowed in Pennsylvania. This blog will analyze data center bills we’ve engaged with, evaluating whether it aligns with our four Data Center Principles. 

NOW LET'S BREAK DOWN THE BILLS

SPONSOR: Representative Robert Matzie [District 16]
PENNFUTURE POSITION: Supports with amendment adopted that aligns with our Data Center Principles
STATUS OF BILL: Passed the PA House and makes its way to the PA Senate
ACTION ALERT:  Take Action: Urge Your State Senator to Pass the Data Center Act (HB 1834)

 

SUMMARY:

This bill directs the Pennsylvania Public Utility Commission (PUC) to create regulations around how data centers are developed in Pennsylvania and proposes increased investment in the Low-Income Home Energy Assistance Program (LIHEAP) and additional investments in community energy projects. Coming in at only 5 pages, the brevity of the original bill was an opportunity for stakeholders' engagement around potential amendments, in which PennFuture was able to provide substantial feedback. You can read our written testimony here.

 

You may remember that PennFuture at one point opposed this bill. Let’s explain why:

 

The original text included a renewable energy requirement that mandated that at least 25 percent of electricity supplied under a contract between a public utility and a commercial data center must be generated from renewable energy sources, including solar, wind energy, biomass, or hydroelectric power. This, we supported.

Then, an amendment passed while in committee added nuclear energy—a critical component of our energy portfolio but not renewable—to this requirement and PennFuture opposed that addition.

 

Nuclear energy already makes up roughly 33% of Pennsylvania’s energy portfolio, if it is included in the definition of “renewable” energy, it has the potential to skew the 25% renewable energy requirement, thereby actually resulting in more fracked gas fueled data centers.

 

At a time when true renewable energy only makes up about 4% of our energy supply, we need to do more now to increase our supply. PennFuture is committed to a clean energy future for Pennsylvania because clean energy sources are cheaper and faster to build, strengthen our electric grid, and bring down costs for consumers. Pennsylvanians are seeing their electricity bills skyrocket because of increased demand from energy-hungry data centers and our overreliance on unreliable fracked gas, which again failed ratepayers during our current cold spell.

 

We believe sensible data center policy must include solutions to meet the need to diversify our energy portfolio and increase renewable energy generation. And we were thrilled to see that legislators listened to our feedback and amended to make necessary changes to the renewable requirement as well as other areas of concerns.

 

With the amendment introduced by state Representative Elizabeth Fiedler (Chair of the House Energy Committee), HB 1834 is now one of our first, real opportunities to regulate the extractive data center industry.

 

Here is what PennFuture President & CEO, Patrick McDonnell, said about the amended legislation in an interview with The Allegheny Front:

 

"Now we have a bill that actually includes renewable requirements, making sure they’re bringing their own energy, making sure if they’re installing backup generators, those generators are not going to be polluting and aren’t going to be run all the time, that the truly are emergency generators."

 

Here is what the bill does:

  • Requires large data centers to get significant portions of their electricity from new in-state clean firm energy resources and long-duration storage solutions
  • Incentivizes data centers to bring their own new, clean firm capacity to fully meet their electricity needs
  • Establishes strong new standards to ensure cleaner, tightly controlled backup power at commercial data centers

PennFuture—along with many other environmental stakeholders—engaged extensively with Reps. Fiedler and Matzie on this critical legislation and we very much appreciate their efforts to ensure that HB 1834 includes strong guardrails to better protect Pennsylvanians from this extractive industry.

 

 

PRIME SPONSOR: Representative Kyle Donahue [District 113]
PENNFUTURE POSITION:

Supports with PennFuture proposed amendment and aligns with our Data Center Principles

STATUS OF BILL: This bill passed in the PA House of Representatives and moves now to the PA Senate.
ACTION ALERT:
Tell the PA Senate: Pass these Critical Data Center Bills!

 

SUMMARY: 

Since the threat of data centers first turned its eye towards Pennsylvania, PennFuture has recognized the power of local municipalities to dictate where data centers can be built and mitigate the harm. We quickly created a Model Municipal Ordinance for Data Centers and a video series intended to educate local communities of the impacts and make it easy for local government to protect those communities.

 

House Bill 2151 could provide another important tool to assist in ensuring that data centers are sited responsibly to minimize negative impacts on residents.

 

Specifically, the bill directs the Center for Local Government Commission within the General Assembly to create their own model ordinance that municipalities can leverage when they update their own zoning ordinances to prepare for data center development. While not diminishing the power of PennFuture’s model ordinance, the Local Government Commission is an already-trusted municipal partner and one with much greater reach than PennFuture. We’ve been working hard to get our model ordinance in front of municipal officials and community leaders, but we recognize our limitations as an organization. That’s why we see value in the state government developing its own model ordinance—its reach and capacity is greater than our own.

 

Municipalities that hesitate to proactively draft and pass data center ordinances put themselves at risk of legal challenges, and ultimately, of losing control over where the project can be located within their community. We believe that our ordinances and our advocacy can work in tandem with what HB2151 proposes to protect more communities from the harmful impacts of data center development and to protect municipalities from the threat of litigation.

 

Many opponents of this bill have a fundamental misunderstanding of what it does: it is not mandatory for any municipality to adopt the model ordinance in any way, shape, or form. Nor would this directly insert the model ordinance into Pennsylvania state law under the Municipalities Planning Code (the statute that regulates how municipalities function).

 

In a state where bans on any type of land use are essentially prohibited, and municipalities risk costly litigation if their ordinances don’t include appropriate consideration of new land uses (like data centers), model ordinances are a useful tool designed to help speed up the process of drafting an ordinance. A municipality can adopt the whole model ordinance, word for word, directly into their existing ordinance, or it can adopt sections of it while keeping the rest of their existing ordinance the same. This bill does not change that freedom. But it does have the potential to give municipalities a head start—just as PennFuture’s model ordinance does.

 

Watch PennFuture President & CEO Patrick McDonnell testify in front of the PA House Energy Committee on February 2, 2026, on HB 2151 here: Instagram

PRIME SPONSOR: Representative Kyle Mullins [District 112]
PENNFUTURE POSITION: Supports and aligns with our Data Center Principles
STATUS OF BILL: This bill passed in the PA House of Representatives and moves now to the PA Senate.
ACTION ALERT: 
Tell the PA Senate: Pass these Critical Data Center Bills!

 

SUMMARY:

This bill establishes annual energy and water reporting requirements for data center facilities. This is a commonsense measure to provide policymakers and residents with a better understanding of the impacts of the data entering industry on our water and electric grid.

 

Currently, Pennsylvania does not have a way to measure and sufficiently understand, let alone plan for, the electricity grid impacts associated with data center operations. By requiring the state to collect and analyze this information, we will be better able to forecast and manage the incoming large loads on the electric grid. It will also provide us with the necessary information on water withdrawal impacts so that we can more closely monitor and mitigate future harms.

 

Currently, policymakers are making decisions about how to regulate data centers at a significant deficit. Data center developers typically do not share more information than is required by law, and frankly, this bill would expand what is required. Bottom line, this bill increases transparency and improves the ability of decision-makers to make truly informed decisions about how data center development could or should occur in Pennsylvania.

PRIME SPONSOR: Representative Joe Ciresi [District 146]
PENNFUTURE POSITION: Supports
STATUS OF BILL: Referred to PA House Energy Committee
ACTION ALERT:
Tell Your State Rep: Prohibit NDAs with Data Center Developers

 

SUMMARY:

Pennsylvanians deserve clear, timely information about whether a data center is planned for their community—and what that project would mean for local energy and water use, costs, and other impacts.

 

Yet, data centers are currently allowed to require that local governments sign non-disclosure agreements (NDAs) to keep key details about what they hope to build, all hidden from the public.

 

HB 2359, sponsored by Representative Joe Ciresi, would put an end to data centers entering into secretive NDAs with local governments.

PRIME SPONSOR: Senator Greg Rothman [District 34]
PENNFUTURE POSITION: Strongly Oppose
STATUS OF BILL: Referred to Senate Communications and Technology Committee

 

SUMMARY:

SB 939 is a legislative proposal that invites Big Tech to pilot their artificial intelligence (AI) systems in Pennsylvania with minimal or no oversight, all while fast-tracking environmental permits for potential new data centers.

 

More specifically, this bill:

  • Creates a new state-level Office of Transformation and Opportunity within the Governor’s office that would encourage construction around data centers, AI, and emerging technologies. (You may be thinking, doesn’t this office already exist? Yes, it does! It was created by executive order in 2023 and therefore exists at the discretion of the Governor but could theoretically be changed or abolished by a future governor. SB 939 would officially establish this office in statute.)
  • Establishes a statewide Commonwealth Opportunity Zone framework intended to attract and coordinate the development of artificial intelligence (AI), data centers, and emerging technologies.
  • Sets up an Artificial Intelligence, Data Center, and Emergency Technology Regulatory Sandbox Program, allowing Big Tech to test AI and related products/services that are NOT REQUIRED to adhere to current regulation or be supervised by regulatory institutions.
  • Provides a permitting structure for large “high impact” data centers, including fast-track and coordinated approvals.

In short, this bill that encourages fast tracking data center buildout would be a disaster at a time when the state needs to slow down and carefully consider how this new type of development is impacting our environment, communities, and economy.

Want to learn more about data centers or know about resources to ensure that your community has safeguards in place?