A commentary by Kleinman Center senior fellow John Quigley argues that Pennsylvania has not meaningfully regulated data center development despite 81 active proposals statewide, a projected $5 billion operating deficit this year, and a sales tax exemption for data center equipment projected to cost the state at least $1.9 billion through 2031. The average Pennsylvania electricity bill has increased 20.6% since 2024, and a record 387,000 households faced utility shutoffs in 2025; the House voted to repeal the sales tax exemption, but the legislation died in the Senate. Across the PJM region, data center-driven capacity charges totaled $29.4 billion across the last four base capacity auctions, nearly half of $63.6 billion in total capacity charges during that period. In Lackawanna County alone, at least 11 major data center projects are proposed, including seven in Archbald Borough, population 7,508, with one project proposing 588 backup diesel generators across 14 buildings.
Pennsylvania's failure to pass substantive data center regulation, despite significant legislative activity, illustrates how states can fall behind on oversight even as fiscal and community pressures mount, with $29.4 billion in PJM capacity charges over four auctions showing the financial scale at stake for ratepayers across 13 states. The combination of a record 387,000 household utility shutoffs and a $1.9 billion uncapped tax exemption makes the regulatory gap a direct consumer and budget issue, not solely an infrastructure concern.
The Kleinman Center for Energy Policy's focused analysis of Pennsylvania's regulatory posture on data centers is timely given Pennsylvania's active legislative environment and its emergence as a key data center market, warranting selection as a distinct policy story.