Data Center Regulation (Or Not) in Pennsylvania: Part 2

Governors have limited authority to regulate data center development, and few administrative tools to unilaterally effect change. The Governor’s Responsible Infrastructure Development (GRID) proposal, developed with input from the industry and others, illustrates these limitations. Unless the General Assembly retains the data center equipment state sales tax exemption and passes legislation to condition it on adherence to GRID, there is no incentive for a developer to adhere to GRID beyond gaining access to expedited state (not local) permitting—and that incentive disappears after receiving those permits. Similarly, there are no enforcement mechanisms—beyond inconsequential loss of “GRID certification”—without legislative action.

Let’s quickly review the four GRID standards.

A robust requirement that data centers pay for their own generation and related infrastructure will need legislative teeth, coordination with PJM for interconnection and transmission upgrades, and empowering the PUC, which currently lacks the statutory authority to enforce its large load tariff model.

GRID’s required percentages of clean power—the most cost-competitive forms of new generation and the cheapest way to meet rising electricity demand—are not ambitious, except in the sense that Commonwealth is currently near the bottom in clean energy growth among states.

The standards don’t even mandate that solar panels actually be built on the required “solar ready” roofs.

The transparency standards list steps, actions, and information that communities should require, and any responsible developer should be doing or providing anyway. “Enabl(ing) meaningful public input” is nebulous, subjective, and unenforceable.

Pennsylvania has enacted requirements for decommissioning commercial solar projects, though it has no similar requirement for things like gas-fired power plants. Data centers would logically be a candidate for such standards, given the risk that the AI bubble could burst.

Data centers are costly to build and require lots of construction workers, so the standards around them are meaningless. The paltry full-time jobs requirement reflects the reality that data centers are capital intensive, and don’t create many permanent jobs.

The “community benefit” language requires only “good faith discussions” to “develop an agreement” about conducting studies that any responsible developer should be performing anyway, and communities should require. For example, light pollution has human health and wildlife impacts. Noise pollution can travel significant distances and cause health and wildlife impacts. Data centers can also reduce local property values (though evidence is mixed). Potential community impacts need rigorous, independent assessment.

There is no requirement for data centers to financially support community priorities.

GRID doesn’t actually require the use of energy- and water-saving technologies, or batteries instead of polluting backup generation (that only has to comply with existing state law and employ best available technology). GRID will “minimize local air pollutants” only in the engineering sense. Look no further than the proposed Amazon data center in Falls Township, Bucks County, a participant in the PA Fast Track Permit Program. Amazon plans 280 natural gas-fired generators and three diesel-fired back up generators.

The standards encourage “good faith efforts to collaborate” on issues like monitoring, mitigation, or the very questionable “offsetting” of environmental impacts—but only if HQ/EV waters and climate-change connectivity areas are impacted. Impacts elsewhere, and on drinking water supplies and groundwater, are not covered.  

Ditto wastewater. Data centers that use water for cooling produce substantial wastewater, which can contain treatment chemicals, concentrated minerals, and heavy metals. If not managed properly, discharged wastewater can pollute local waterways, overburden sewage treatment plants, and impact water quality for communities downstream.

Further, recent announcements from Google, Amazon, Nvidia, and Microsoft about reducing their water use don’t mention that alternative cooling systems typically use a hazardous PFAS “forever chemical” gas instead of water.

Ambient thermal pollution is also ignored. Data centers can raise local temperatures and increase energy burdens in nearby neighborhoods.

In sum, GRID’s subjective, weak, or incomplete standards are not protective, and its exhortations to “good faith” are not enforceable.

Data centers’ social license to operate should be earned, communities should be protected, and state standards governing their development should ensure it.