First Bill Regulating Data Centers Passes In PA House: What To Know

HARRISBURG, PA — The first ever bill regulating data centers has passed in the Pennsylvania state legislature, as policymakers scramble to catch up with the impacts that facilities being used to power artificial intelligence systems have on the electrical grid and the environment.

The bill seeks to prevent big tech companies, who often shroud their identities when introducing proposals, from pushing the costs of increased electrical usage back to taxpayers through utility hikes. PECO just announced a major utility hike proposal last week.

The bill would also require data centers to be powered by larger amounts of in-state renewable energy sources, like wind and solar.

"The bill's protections ensure data centers pay for the infrastructure costs they cause, build new clean generation, and make meaningful contributions to rate assistance and energy conservation programs that serve hundreds of thousands of economically vulnerable Pennsylvanians each year," said Elizabeth Marx, executive director of the Pennsylvania Utility Law Project. "Pennsylvania families already face unaffordable energy bills. They must not be forced to bear the additional cost of data center growth."

Related: Amazon's $20 Billion AI Data Centers Under Fire In PA

Despite the higher energy bills, water usage, and other severe environmental fallouts, there remains no statewide standard or oversight on data center construction.

In fact, rather than seek to regulate what bills utilities can pass on to taxpayers, Gov. Josh Shapiro has sought to remove the authority of local jurisdictions in approving and disapproving data center plans. Under proposed legislation, a small state-run board would be able to approve projects without any further oversight.

The tension between supporters and opponents of these projects has rewritten traditional battle lines in many communities. Some Democrats aligned with Shapiro's proposal, like Democratic U.S. Sen. John Fetterman, continue to fight for unrestricted growth, while many Republicans have pushed back against state control and impacts on local communities.

The energy the new data centers require to power artificial intelligence systems is enormous. Average U.S. electricity generation costs could skyrocket by 8 percent by 2030 absent radical policy change, according to a June 2025 study from Carnegie Mellon University. In markets where data centers are pulling from the local grid, that could be as high as 25 percent, the study shows.

Researchers also expect data centers increase greenhouse gas emissions from power generation by 30 percent over the next five years. Cooling requirements for vast supercomputers also cause carbon emissions, raising a similar concern to cryptocurrency mining.

The House bill passed 104 to 95, mostly along party lines. It is now in the state Senate, where Republicans hold a 27-23 majority. It is not yet clear what level of support it will have there, and if the Senate will force the bill to Shapiro's desk.