The Permit You Can Now Block

Pennsylvania Gov. Josh Shapiro signed Executive Order 2026-05 on 18 August 2026, requiring data center developers to obtain local approval before the state will review permits. The order does not include a moratorium, but requires local approval to receive state permits, which in effect may block many projects from moving forward. For projects that do not comply with the GRID standards, the state's Department of Environmental Protection will not even begin reviewing state permit applications until developers have obtained all necessary local permits, and the policies collectively are likely to give local officials more leverage over data center projects.

If you live in a Pennsylvania township, you now hold something you did not hold three weeks ago: a mechanism to prevent a datacenter from raising your power bill by refusing to approve it at the zoning meeting. This is not consultation. It is not a hearing where you speak and the state decides anyway. It is conditional permitting, where state review waits until local consent is secured, and municipal officials have significant authority over local land use decisions, and now that state permit review is contingent on local approvals, data centers face new leverage from local officials.

Shapiro, a first-term Democrat running for reelection and rumored 2028 presidential contender, had been an early champion of data center development in Pennsylvania, including a $20 billion commitment from Amazon to build at least two data centers in Bucks and Luzerne Counties. Shapiro signed the executive order dramatically shifting his stance on data center development in Pennsylvania, calling out "predatory" data center developers who are "running roughshod" over local communities. The reversal took seven months. In the announcement, Shapiro said Pennsylvania will no longer permit projects without local support, referencing developer Brian O'Neill's efforts to construct data center buildings in the King of Prussia community, noting the developer was stoking fear even though he had no realistic path to getting power at the sites any time soon.

The power question sits at the centre of what changed. Utilities requested $18.6 billion in rate increases in the first half of 2026 alone, and residential electricity rates are up 7.3% nationally over the past year, with utilities asking state regulators for $18.6 billion in electricity rate increases in just the first six months of 2026, already more than half of all of 2025's record $29 billion in requests. In Virginia, the state with the most data centers, residential electricity prices have increased by more than 13% in the last year. Nearly three-quarters of voters in Virginia blame data centers, largely clustered in Northern Virginia's Data Center Alley, for rising electricity costs, according to a January 2026 survey conducted by Global Strategy Group and the Chesapeake Climate Action Network Action Fund.

A November 2025 nationally representative survey of 2,146 U.S. adults by Consumer Reports found that 78% of Americans are somewhat or very concerned that the new data centers being built across the country will make their energy bills go up. A recent poll found that 65% of Americans surveyed oppose data centers in their communities. That opposition has organised. The first quarter of 2026 reflected a structural shift rather than a cyclical spike, with communities internalising an opposition playbook, legislative sessions introducing formal regulatory uncertainty, and the number of active opposition groups more than doubling to 833 across 49 states. Data Center Watch found that data center opponents blocked or delayed at least 75 projects nationwide worth about $130 billion from January through March, the most in a three-month period since the group began tracking in 2023.

Pennsylvania's move follows other state-level shifts. In July 2026, New York Gov. Kathy Hochul placed an effective moratorium on data center permitting until the state's Department of Public Service creates a generic environmental impact statement regarding the impacts of data centers. In August 2026, Texas Gov. Greg Abbott announced a moratorium on data centers until state agencies can audit data related to impacts on the electric grid. In 2026, more than 300 state data center legislation bills have been filed across 30+ states in just six weeks, marking a shift from incentive-focused policies to regulatory oversight as energy demands become clearer.

The arithmetic on bills is contested. A study from the Electric Power Research Institute found that data centers put downward pressure on average electricity prices through 2024, but that might not continue if data center demand outpaces electricity supply. From 2014 through 2024, during the pre-hyperscaler period, research did not find robust evidence that data center openings produced meaningful increases in residential electricity bills, but the future could look very different. PJM's 2025/2026 capacity auction cleared at $269.92 per megawatt-day for much of the region, up from $28.92 in the prior auction, which is a very large increase that PJM attributed to a combination of tighter supply, higher demand, market rule changes, and declining offered capacity.

The interconnection queue is a separate constraint. As of early 2026, U.S. queues contained 2,600 GW of proposed generation and storage, creating multi-year delays with wait times extending to five years or more. The median wait time for a project to reach commercial operation is approaching five years, with some sectors like data centers facing potential delays of up to 12 years. New high-capacity grid connections in major data center hubs, including Northern Virginia, Dublin, Singapore, and Amsterdam, now face 4-7 year wait times.

Water sits alongside power as a blocking issue. Large data centers can consume up to 5 million gallons per day, equivalent to the water use of a town populated by 10,000 to 50,000 people. All data centers in Northern Virginia consumed close to 2 billion gallons of water in 2023, a 63% increase from 2019, with Loudoun County using around 900 million gallons in 2023. Research put U.S. data centers' direct water consumption at 17-19 billion gallons annually, a figure projected to rise to 60-110 billion gallons by 2030.

The Pennsylvania order specifies energy, transparency, local workforce, and environmental standards. One of the requirements of GRID is that data centers will have to "bring their own power" and not rely on the region's electrical grid, and centres will also have to commit to provide 32% renewables by 2035. Data center plans, including water usage and any resulting pollution, will have to be permitted by the Pennsylvania Department of Environmental Protection, and the order instructs the DEP to create new regulations limiting data center pollution.

Jackson Township Council in New Jersey voted 4-1 to ban data centers, making it the 38th municipality in New Jersey to enact such a prohibition, adding to a growing statewide trend of New Jersey municipalities blocking data centers as communities push for greater local control. Pataskala, Ohio, City Council unanimously rejected Aligned Data Centers' site plan for a proposed 200-megawatt campus over unresolved power-supply questions, and the issue now heads to a November ballot measure deciding whether large data centers are allowed in Pataskala and Granville. In Maryland, Expedited Bill 19-26 was signed into law on 10 August 2026 after an 11-0 council vote, establishing a moratorium on data-center building permits.

Pennsylvania's shift does not remove the incentive structure completely. States including Virginia, Georgia, and Maryland gave data centers billions in sales and property tax exemptions to attract them, with Virginia forfeiting $1.6 billion and Georgia expecting $2.5 billion, and lawmakers in several states are now moving to repeal those breaks. States are reconsidering data center tax incentives, with Virginia, Georgia, and Oklahoma proposing to reduce or eliminate credits that previously attracted these facilities, and new energy policy proposals aim to ensure facilities pay the full cost of grid connections and participate in demand response programs, with at least 18 states introducing bills creating special rate classes for large energy users.

What the Pennsylvania order changes is sequence. State environmental review used to run in parallel with local zoning. Now it waits. If your borough planning commission votes no, DEP does not open the file. The developer can appeal the zoning decision, but that appeal runs through local courts under local land-use law, not through a state process that weighs regional economic benefit against your well. The state has subordinated its own permit authority to municipal consent, which gives you standing you did not have when the only question was whether the project met state environmental thresholds.

Of datacenter projects proposed in Pennsylvania, 15 have applied for at least one DEP permit, and only five have received all necessary permits required for their first phase of development. Fifteen files are now frozen until townships decide. Five are grandfathered. Everything filed after 18 August 2026 enters under the new rule. The next project that shows up at a planning commission meeting in a Pennsylvania township arrives knowing the zoning vote is the gate, not a formality. That shifts who the developer has to convince, and it shifts what you can block by showing up on a Wednesday night with a question the applicant cannot answer about who pays for the substation upgrade on the road you live on.

Tarry Singh is the founder and CEO of Real AI (realai.eu), an enterprise AI advisory and deployment firm working with global enterprises on production agent systems, model risk, and AI sovereignty strategy. He also leads Earthscan (earthscan.io) for Energy AI, and is a founding contributor to the EU-funded HCAIM and PANORAIMA programmes for responsible AI education across European universities. He writes at tarrysingh.com.