By Gordon Tomb

In July, nearly two dozen companies gathered in Pittsburgh, along with President Donald Trump and other leaders, to announce investments in data centers and needed energy infrastructure. Totaling more than $90 billion, the expenditures would equal nearly ten percent of Pennsylvania’s gross domestic product, inducing a headline that described the prospect as “truly mind-blowing.”

Since then, some have begun erecting regulatory obstacles to this development. Presented as consumer protections, many are more likely to be economy killers — and “mind-blowing” for would-be reformers of 164,000 regulations already dampening Pennsylvania’s business climate.

Consider a six-bill package introduced by seven Democrat members of the Pennsylvania House of Representatives “to encourage the responsible development of A.I. data centers addressing water and energy use, emergency preparedness,” and more.

Pennsylvania has power plants, steel mills, factories, coal mines, and acres of warehouses—all of which deal with a host of regulations to address these same issues. One bill would impose energy-efficiency standards on data centers when there is no more powerful incentive for prudent use of resources than the profit motive.

Why are lawmakers specifically targeting these information processors?

“This is an attempt to throttle new data centers to prevent more natural gas from being used to power them,” writes Jim Willis, publisher of Marcellus Drilling News. “‘Responsible development’ is code for no development.”

A seventh House bill, titled the “Data Center Act,” would require the eponymous facilities to get at least 25 percent of their energy from so-called renewable sources, defined as wind, solar, biomass, and hydroelectric.

Such market meddling has contributed to rising electricity prices and a more fragile power grid by giving preferential treatment to expensive and unreliable energy sources—particularly wind and solar. Moreover, misguided policies have shortened or ended operations for more practical technologies, such as coal- and natural gas-fired power plants.

At a hearing before the Pennsylvania House Committee on Energy, several witnesses cautioned against the bill’s renewable mandate. They included Stephen DeFrank, chairman of the state Public Utility Commission; Joe Bowring, an independent market monitor with PJM Interconnection; Dr. Amy Brinton, director of government affairs with the Pennsylvania Chamber of Business and Industry; Rob Bair, president of the Pennsylvania Building and Construction Trades Council; and Dan Diorio, vice president of state policy with the Data Center Coalition.

State Rep. Mike Armanini, one of at least two Republican committee members opposing the mandate, noted that a 2019 proposal by then-Gov. Tom Wolf to impose a tax on fossil fuels had discouraged investment in natural gas plants. He also said that another House committee “would kill the natural gas industry” with a proposal to establish a gas-well setback of nearly a mile.

State Rep. Rob Matzie, a Democrat and the bill’s prime sponsor, agreed that avoiding overregulation was important. But Matzie insisted that policymakers should “promulgate some regulations early from a temporary perspective, and then move forward.”

Perhaps Matzie is testing political winds with the mandate provision. However, once enacted, most regulations are about as “temporary” as the Great Pyramid of Giza.

Enacted two decades ago, the state’s Alternative Energy Portfolio Standards Act (AEPS) cost electricity customers more than $700 million in 2024 in compliance costs alone. Meanwhile, the wind and solar energy it subsidizes remains unreliable and too expensive to survive in a free market.

In Arizona, regulators have voted unanimously to begin repealing that state’s version of AEPS, reports the American Legislative Exchange Council (ALEC). Rating states based on various policies, ALEC ranks Arizona near the top nationally, at second and sixth for economic performance and economic outlook, respectively. On the other hand, Pennsylvania’s rankings are a pathetic 44th and 36th.

Noting Arizona’s economic success, ALEC partially credits the state’s “infrastructure capacity to support resource-intensive industries,” such as data centers that “require dependable, uninterrupted sources of baseload electricity to stay operational.”

If there is to be legislation on data centers, a proposal by state Sen. Camera Bartolotta offers a more viable solution. Barlotta’s bill would expedite permits for projects that meet or exceed federal standards.

Better still would be fulfilling the promise of broad permitting reform in a recent budget agreement. And while budget negotiations ended the threatened implementation of Wolf’s 2019 tax on fossil fuels, Gov. Josh Shapiro should drop his own attempts to tax reliable energy sources and force renewable energy on consumers.

As Rep. Armanini put it: “What are we going to do with Pennsylvania? Are we going to overregulate it and not let [the energy] industry grow? Or are we truly going to work toward Pennsylvania energy dominance? … We need to get into the game of being competitive.”

A competitive Pennsylvania is not out of reach. Thankfully, regulatory reform found its way into the newly minted state budget, suggesting the push for commonsense regulation is quickly gaining momentum in Harrisburg.

This commentary was first published by Broad and Liberty on December 1, 2025.

Gordon Tomb is a senior fellow with the Commonwealth Foundation and a senior advisor with the CO2 Coalition in Arlington, Va.