Data center expansion, driven by AI, is coming at a cost to some communities. The developers of these projects often promise jobs, but they are not always made to deliver. There are steps governments can take to ensure data centers benefit the communities they are built in, and transparency is critical.
Response to such endeavors has been mixed. City Council members in Tucson, Ariz., last summer rejected a data center proposal after a rocky reception from residents. The City Council in Forsyth, Ga., however, voted this week to move forward on a development over local opposition, citing the chance to increase tax revenue without changing the community’s character. And from Arizona to Indiana, several governors have struck cautionary notes on data centers in their State of the State addresses this year.
Shapiro announced the Governor’s Responsible Infrastructure Development (GRID) standards during his fiscal year 2026-2027 budget address, delivered on Tuesday in the Keystone State.
The GRID standards were developed by the Shapiro administration, with input from the community, to hold data center developers accountable for their builds, he said during the address. He called on the General Assembly to codify these principles.
The standards require several things of developers.
First, they must commit to bringing their own power generation or paying for new power generation so as to not burden homeowners and businesses with added costs. These expenses are often passed onto the ratepayers; in some areas, data centers are expected to result in a 25 percent increase in residents’ electric bills by 2030.
Second, developers in Pennsylvania will be required to commit to strict transparency standards and community engagement.
“Too many of these projects have been shrouded in secrecy, with local communities left in the dark about who is coming in and what they’re building,” Shapiro said during the address. “That needs to change.”
Many of these builds are advancing without allowing for public input, and government officials are even signing nondisclosure agreements to limit public discussion around these projects.
Third, Pennsylvania data center project developers will be required to enter into community benefit agreements — contracts that guide development practices — to fund local priorities and support the towns they are built within. This includes hiring and training local workers. One report found that despite data center developers touting job creation benefits, the projects create few permanent, high-paying jobs.
Finally, the GRID standards require developers to commit to “the highest standards of environmental protection,” including water usage.
Water usage is a topic of contention in the data center debate, especially in areas facing water scarcity. Some data centers are requesting up to 6 million gallons of water per day — in this instance, more than the entire daily usage of the county in which the center sought to operate.
“If companies adhere to these principles, they will unlock benefits from the commonwealth, including speed and certainty in the permitting process and our available tax credits,” Shapiro said.
The governor underlined the role AI is already playing in the state’s economy, highlighting a $20 billion investment from Amazon last year.
The state’s CIO, Bryanna Pardoe, previously told Government Technology that AI use cases within state government require approval from the state’s Generative AI Governing Board so that AI is being used with the “right hammer, right nail” across the state.
The governor also acknowledged that AI tools, enabled by data centers, are already impacting the work of businesses and hospitals. Notably, he acknowledged that children are using AI tools in a way that is “entirely unregulated,” and he said his administration will put safeguards in place, calling on the General Assembly to enact commonsense, bipartisan protections.
The protections he called for include age verification and parental consent, company detection and reporting when self-harm or violence is mentioned by children, periodic company disclosures to users that remind children there is not a human on the other side of a chatbot conversation, and prohibition of AI chatbots producing sexually explicit or violent content featuring children.
“We can play a leading role in winning the battle for AI supremacy — but we have to do it in a way that puts the good people of Pennsylvania first,” Shapiro said.
