AI Data Centers Are Coming to Pennsylvania: What Landowners, Developers, and Energy Suppliers Need to Know About Land, Water, Power, and the Legal Framework; What Issues Are Key in Pennsylvania?
August 27, 2025
A recent Energy and Innovation Summit presented by Pennsylvania Senator David McCormick – attended by the President, Governor Shapiro, and key business leaders – focused on the expanding role and economic benefits of data centers in the state. The Pennsylvania General Assembly has held hearings on the topic, and several Senators have introduced legislation aimed at streamlining the development process. Meanwhile, industry leaders have announced billions of dollars in potential investments. New projects have begun to be announced.
What Are Data Centers and Why Do They Matter?
Data centers are the backbone of the digital economy. They power the internet services we rely on daily, such as photo storage, video streaming, financial transactions, and increasingly, generative AI. As AI continues to scale, so will the demand for data storage, and the accompanying energy required to power it.
Key Considerations:
Land Use
Data centers are low-traffic, high-value assets that generate significant tax revenue while placing minimal strain on local infrastructure such as roads or schools. However, local land use policies and zoning regulations must be carefully considered. Data centers require a considerable amount of land, especially if co-located with power generation facilities. Use of a large land parcel of course makes that land unavailable for other uses that might be of greater interest to community members. Some communities are requesting Community Benefit Agreements (CBAs) to ensure developers contribute positively to local priorities. Balancing economic development with community interests will be essential.
Water
Pennsylvania’s abundant lakes and rivers are critical assets for the cooling systems used in both data centers and the power plants that support them. However, concerns over long-term water sustainability are prompting exploration of more efficient technologies, like dry cooling systems, to reduce water consumption and environmental impact. However the water demand for these centers is a concern. Currently, centers require enormous amounts of water since servers run nonstop. They are often surrounded by a network of cooling tubes and towers of chilled water.
Water resources in Pennsylvania are carefully managed, especially within the Susquehanna and Delaware River basins, with regulatory requirements applicable to water withdrawal and use. There are almost 2,000 community water providers in Pennsylvania, but most of them are very small. Investor-owned water companies actually serve twice as many customers as do municipally owned systems. Obtaining water supply from either a municipal or privately owned water system is a sometimes overlooked key task in siting any data center (unless the site itself can self-supply its water needs).
Appropriate planning is also necessary for circumstances where there is too much water, such as extreme weather events and associated flooding; even if rare, such events are occurring with increasing frequency. Also, data center development needs to be cognizant of stormwater requirements, as data centers create a large area of impervious surface that can generate considerable quantities of stormwater – and resulting stormwater fees.
Energy Infrastructure
Pennsylvania is an “all-of-the-above” energy state, with ample natural gas, nuclear, coal, and renewable energy resources. While energy supply is not currently a constraint, upgrades to the state’s transmission infrastructure may be needed to accommodate growing demand. Grid modernization and legislative reforms could help ensure reliable, efficient energy delivery to data centers across the state.
Many especially large data center developments are considering or planning on constructing power generating facilities at the same site. This is a particularly attractive option in Pennsylvania given the available natural gas supply. Co-locating with power generation provides an available and reliable power supply, but increases the complexity of any project. Power generation facilities bring with them a wide range of environmental and energy regulatory and compliance considerations. Whether the data center power is supplied from a “behind the meter” or “in front of the meter” energy source, the project will have to ensure sufficient energy and transmission/distribution resources, navigate a variety of state and federal requirements and successfully negotiate interconnection and back-up agreements.
In Pennsylvania, a key consideration may be the use of Pennsylvania’s plentiful natural gas resources as an energy source. Any project that uses Pennsylvania gas will likely be viewed more favorably by local and state regulators. But utilizing local gas can also bring additional issues including private pipeline approvals, gas transportation and purchase agreements and natural gas distribution company interconnection.
Legislation
With its rich energy resources, strong water supply, skilled workforce, and solid digital infrastructure, Pennsylvania is well-positioned to become a global hub for data center and AI-driven investment. However, strategic legislative changes may be required. Stakeholders must closely monitor current environmental laws and remain alert to potential reforms.
At the federal level, the White House has released America’s AI Action Plan, which calls for faster permitting processes and reconsideration of certain environmental regulations. In Pennsylvania, State Senator Greg Rothman has introduced bipartisan legislation to create Commonwealth Opportunity Zones (COZs): a statewide initiative aimed at regulatory relief to attract data center and AI-related investments.
Looking Ahead
Municipal leaders, public water providers, landowners, utility companies and energy suppliers, and developers should pay close attention to legislative developments and industry trends. With coordinated planning and thoughtful regulation, the Keystone State has the potential to lead the next wave of digital infrastructure investments.
This Energy Update is intended to keep readers current on developments in the law. It is not intended to be legal advice. If you have any questions, please contact Robert DeSousa at 717.237.6064 or rdesousa@eckertseamans.com, David Rockman at 412.566.1999 drockman@eckertseamans.com, Lauren Burge or Dan Clearfield at 412.566.2146 (lburge@eckertseamans.com) or 717.439.5231 (dclearfield@eckertseamans.com) respectively, or any other attorney at Eckert Seamans with whom you have been working.
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