New Shapiro order could face challenges

Questions arise whether governor has authority to enact order

Gov. Josh Shapiro could face legal challenges to some areas of his multi-faceted executive order on data centers, according to a former two-time state cabinet secretary.

"The question of the governor's authority isn't necessarily set," said John Quigley in an interview.

Quigley served as secretary of the state Department of Environmental Protection under Gov. Tom Wolf and secretary of the Department of Conservation and Natural Resources under Gov. Ed Rendell.

He is a senior fellow for the Kleinman Center for Energy Policy and wrote several essays recently about state data center policy,

Shapiro's Aug. 18 executive order sets requirements that data center developers are to meet regarding energy affordability, community engagement, workforce and economic development, transparency, environmental protections and local approval to obtain necessary state permits.

The order also removes data center projects from DEP's fast-track permit process and bans non-disclosure agreements for data center projects.

Responding to a flood of more than 100 data center projects, Shapiro said a data center project must get community support in order to get state support.

The order puts some guardrails in place, but some have to be coordinated with entities outside the governor's control, said Quigley.

For example, the order directs the governor's counsel on energy affordability to "engage" with the state Public Utility Commission to ensure data centers don't shift energy costs onto consumers.

The PUC is an independent agency that deals with other agencies like PJM, the regional electric transmission operator, and other state utility commissions.

The order directs the state Revenue Department to change the guidelines for the state tax exemption for data centers on equipment purchases to ensure recipients abide by the GRID standards developed by the Shapiro administration.

Quigley questions whether Shapiro has the authority to change a program enacted by the Legislature.

GRID standards

The GRID standards were issued by Shapiro earlier this year to guide data center development.

The order directs DEP to review data center applications only if they have local approval and expedite reviews where a developer has signed a legally binding consent order and agreement based on GRID, wrote Quigley.

The GRID standards are in House Bill 2650 passed by the Democratic-controllled House last June. But the Republican-controlled Senate hasn't acted on the bill.

Shapiro said he issued the executive order because the Senate didn't pass a GRID bill during the spring session.

Quigley wrote that GRID's clean power requirements are not ambitious and its community benefit provision could be stronger.

The GRID requirement that data centers bring their own power supply will need legislative action, coordination with PJM and greater authority for the PUC to be effective, added Quigley.

Severance clause

One unusual feature in the order is a severability clause, said Quigley.

That means if one part of the order is struck down by a court the other parts would still stand.

The clause could reflect an anticipation by officials that some parts won't survive a legal challenge, he added.