THE IMPORTANCE OF PENNSYLVANIA'S DATA CENTER ORDER

Governor Shapiro's executive order was more than just political theatre. It fundamentally shifts the power on where to site new data centers back to communities where the democratic process has been, so far, subverted by clever legal maneuverings by the data center industry. Is Pennsylvania going to be the new model going forward?

In August 2025, almost 1000 residents showed up at a Tucson City Council meeting to protest the development of a 290-acre, 600 MW data center campus called Project Blue. The project had been quietly assembled behind an opaque wall of non-disclosure agreements and third-party permitting that hid who the hyperscaler was behind the ambitious development. If not for a leak, the public would never have even known of Amazon's involvement. That evening resulted in a unanimous 7-0 vote by the Tucson City Council to kill the project, resulting in a raucous ovation by the residents present.

Four months later, though, the project was back on, approved 4-1 by the Arizona Corporation Commission through a power supply deal with the local utility and restructured to sit on unincorporated county land just outside the city's jurisdiction. What had looked like a democratic win for the community was papered over by the developer simply shifting the venue to a more favorable location.

As the resistance to data centers grows, more communities are rising up through the venues that they have traditionally used to express grievances and concerns. But the reality is that these community forums haven’t been as robust as needed and developers have used clever legal run arounds to continue to push through their projects. These may be short lived wins, though, as communities are increasingly becoming sophisticated in their legal opposition. And if Pennsylvania Governor Shapiro’s executive order mandating that developers obtain local community approval first is a sign, the page may be turning on developers used to getting their way.

The Resistance

It’s been remarkable how quickly public sentiment has coalesced around this issue. I spent the past few weeks documenting resistance events, moratoriums, permit denials, ballot measures, legislation, rate cases, lawsuits, organized campaigns in order to isolate what’s driving community backlash.

The trend line is not subtle. Only a handful of events occurred in all of 2023 and 2024 combined, ten in 2025, and more than thirty just in the first eight months of 2026. Data Center Watch, which tracks this at the project level, counted roughly $64 billion in blocked or delayed projects cumulatively through 2025. Just through the first quarter of 2026, they estimate that over $130 billion across 75 projects were being fought. More than 300 data center bills hit state legislatures in the first six weeks of this year. Fourteen states saw statewide moratorium proposals, from both parties. Maine passed the nation's first statewide moratorium in April, though it was vetoed by the governor to protect a single mill-town project with the override falling short at 72-65. Over a hundred localities have now paused or prohibited development and active opposition groups operate in 49 states.

Heatmap Pro has asked Americans the identical question four times over the last twelve months. “Would you support or oppose a data center near where you live?”

In August 2025, the country was split, roughly 43 percent supporting to 42 percent opposing. By February, opposition had risen to 51 percent. By May, 70 percent. As of today, 75 percent oppose new local data center development, with more than six in ten *strongly* opposed. And strong support has collapsed from 13 percent to 4. Gallup found essentially the same thing in March discovering 71 percent opposed to new data centers along with an interesting side note: Americans are now more opposed to a data center in their community than to that of a nuclear power plant.

Venue Matters

The volume of resistance matters. But it’s not enough. As I alluded to earlier, it’s been the venue in which the case is fought that has grounded the effectiveness of community backlash. Community council meetings have proven fragile.

Consider Saline Township, Michigan - a farming community of a few thousand people that voted 4-1 in September 2025 against rezoning 575 acres of farmland for a $7 billion, gigawatt-plus campus serving Oracle and OpenAI. Two days later, the developer and landowners sued, alleging exclusionary zoning based on the fact that the township had no industrially-zoned land at all. Under Michigan doctrine that means a "legitimate" land use cannot be excluded outright. The township's own attorneys advised that there were multiple paths for the developer to get around community sentiment - bypassing local zoning entirely. Within five weeks the developer had a consent judgement and DTE, the local utility, had already banked a $40 million non-refundable deposit before the community's vote was ever cast.

But the choice of venue can cut both ways, too. In Prince William County, Virginia, the community lost its vote. The Digital Gateway (a 2,100 acre, 37 data center megaproject) was approved in December 2023 despite a 29-hour public hearing of overwhelming opposition. The residents won anyway. They moved the fight into court and killed the project on procedural grounds: the county had botched its statutory newspaper-notice requirements, and a judge voided the rezonings entirely. The community won on a technicality that the developer hadn’t followed proper process. Not because the community was united in opposition.

And then there is Monterey Park, California, where the city council understood the game with unusual clarity. Rather than simply banning data centers by ordinance, the council sent the ban to the public. One councilmember explained the logic openly, telling a court that a vote by residents themselves (and not just a handful of council members) results in a far stronger position. In June, Measure NDC passed with more than 86 percent support, enacting the first permanent municipal data center ban in the country, undoable only through another public vote. The developer withdrew before the ballots were even counted.

A community typically gets one shot to shut down development. But the traditional venue nearest to it is frequently the venue with the least authority over the resources that matter most. The town hall neither controls power, water resource, zoning - it may be the most democratic of forums but has little influence on real outcomes.

The purest expression of the asymmetry isn't even a siting fight. It's in the electricity bill. Capacity prices in PJM went from $28.92 per megawatt-day for 2024-25 delivery to $333.44 for 2027-28. The market monitor attributed 63 percent of the first spike, some $9.3 billion, to data center demand. NRDC projects $100 to $163 billion in cumulative ratepayer exposure through 2033. And in November 2025, the PJM stakeholder process voted down every major proposal to make data centers carry more of their own burden. Sixty-seven million people are absorbing these increased capacity payments, regardless of their community outrage.

Pennsylvania’s Executive Order

Which is what makes Governor Shapiro's executive order this month genuinely different from the wave of moratoriums and study commissions around it. The order requires local approval of data center projects before the state issues permits. "We will not be bullied by developers and bulldozed by the lawyers," Shapiro said at the signing.

Pennsylvania fundamentally shifted power back to the community by re-sequencing venues. Local consent can no longer be routed around, it is a gate through which all other permits must pass. The Tucson maneuver, running a locally-rejected project through a friendlier state commission, is structurally unavailable. The Saline maneuver, converting a zoning denial into leverage litigation while state-level approvals proceed, loses its engine.

The order reallocates power back to communities. Is it fool-proof? Hardly. But the mechanism may be more durable than a hodgepodge of local resistance efforts attempting to thwart well-funded corporate attorneys in multiple venues. It at least reaffirms that communities have a democratic voice and stake in their local development.

The Lemons Market

What’s important to consider is that Pennsylvania is on the front edge of legislating resistance to data center build out. Similar (and probably more structurally effective) legislation will likely emerge before the midterms are even decided this year. And data center developers slow to adapt to the emerging fury to their industry are likely to find that creative legal entreaties are likely to be increasingly closed off to them.

But this can be seen as an opportunity if developers are smart. Because, make no mistake, right now every data center is being lumped together in one foggy mess. There’s an opportunity to differentiate one’s project in a meaningful, valuable way.

Consider that every poll cited above asks about "a data center." Not an operator - a category. And a category's reputation is set by its worst-performing members, because those are the ones that generate national coverage. xAI ran as many as 35 unpermitted gas turbines at its first Memphis facility. And they ran 27 more across the state line in Southaven, a metro already failing federal ozone standards and adjacent to majority-Black neighborhoods. That prompted a Clean Air Act lawsuit that the federal government then intervened to quash. A major operator's Georgia facility drew 29 million gallons in fifteen months while neighbors reported failing water pressure the same company was found running 40 unpermitted wells in Iowa. In Newton County, Georgia, a facility consuming a tenth of the county's daily water sits in a county projected to hit a water deficit by 2030, with residents' rates rising 33 percent.

That is the industry's public face and the general public can’t distinguish between Musk’s running roughshod over yet another disadvantaged community and that of a more well-meaning developer.

And so we get moratoriums. But those bans cannot distinguish the operator who would have run closed-loop cooling and funded the substation from the one who wouldn't. They simply lump all developers together.

Economists have a name for markets where buyers cannot verify quality before committing: lemons markets. And they have a well-known result - when quality is unobservable, everything gets priced at the worst case. Seventy-five percent opposition is the worst-case price that, today, the entire industry must pay.

What the industry has failed to understand, to date, is that its own standard operating procedure is what makes quality unobservable. The lack of transparency is exactly what is contributing to this problem. It’s the NDA that hid Amazon as Project Blue's end user and hid the projected water draw and power demand. Or consider the secrecy around the project and transmission line associated with the Stargate project in Port Washington, WI - where an incentive deal closed before affected residents ever had a chance to speak. Or the backlash against Louisiana regulators who, behind NDAs signed with Entergy and Meta, pushed through permitting for three new power plants based on language literally submitted by an Entergy VP.

Differentiating Through Community Engagement

Data center developers argue that confidentiality is necessary amid the competitive gold rush to build out new projects. But that confidentiality has come at a cost of public sentiment.

Because that is what Pennsylvania's order really announces, and what the polling trend confirms. Consent is becoming a production input. The developers who internalize this first get something their competitors cannot buy: the ability to walk into a contested market as the visibly-not-xAI option.

The template already exists, ironically, in the Saline consent judgment that ensured no expansion beyond the approved footprint, enforceable noise limits, and no water-intensive evaporative cooling. Every one of those terms was extracted through litigation after the relationship was burned. And every single one could have been offered on day one, at a fraction of the cost, and would have read as leadership instead of defeat.

The solution is not difficult. Disclose the resource draw on energy, water, and other resources before the community discovers it. Drop the NDAs if the project cannot survive its own numbers being public, the numbers are the problem. Volunteer the ratepayer firewall rather than fighting it. A tariff structure that Ohio regulators imposed, with minimum-take commitments that keep speculative load off residential bills, is a model a developer could adopt as a standing offer. Put community benefit terms in enforceable instruments, not press releases. And treat local consent as binding everywhere, whatever the legal map currently says, because the political map is redrawing the legal one in real time.

And involve the community early. Building trust and goodwill should never be an afterthought. And planting a few trees or funding a school program is hardly the panacea that some developers believe it is.

For a decade, the industry's core competency has been velocity. Which meant treating the community as a venue to be routed around rather than a counterparty to be persuaded. That era is closing on every front at once: in the courts, in the statehouses, at the ballot box, and in the polling that now shows this infrastructure less welcome than nuclear power. The developers who keep playing venue games will keep winning battles but will be losing the overall war. The ones who move first on transparency and consent will find something unexpected on the other side: a market where 75 percent opposition to the industry is not a wall but a moat protecting whoever proves, verifiably, to be the exception.