Pennsylvania just imposed binding “best practice” standards on data center developers while Ohio advances a 10-gigawatt campus backed by 9.2 GW of new gas-fired generation – together signaling that state governments are now the primary arbiters of whether AI-driven electricity demand accelerates decarbonization or locks in fossil infrastructure for decades.
Shapiro’s Order Moves Pennsylvania From Voluntary Guidelines to Enforceable Conditions
Governor Josh Shapiro’s executive order, signed in late May 2025, converts the “best practice” framework his administration published this spring into mandatory requirements for any data center project seeking state permits, incentives, or grid interconnection approvals. The order requires developers to demonstrate they have secured generation and transmission capacity without shifting costs to existing ratepayers, submit community engagement plans that address noise, water use, and traffic, and commit to measurable efficiency and emissions targets aligned with Pennsylvania’s climate goals. The administration framed the move as a response to a pipeline of more than 4 GW of proposed data center load across the PJM territory in Pennsylvania – roughly equivalent to adding four large nuclear plants to the grid within five years.
Unlike earlier voluntary frameworks in Virginia and Texas, Shapiro’s order ties compliance directly to the state’s permitting authority under the Air Pollution Control Act and the Public Utility Code. That gives the Department of Environmental Protection and the Public Utility Commission leverage to condition approvals on binding capacity procurement contracts, not just aspirational pledges. For developers, the practical effect is that a project cannot advance to construction without executed power purchase agreements or self-build generation that the PUC certifies as incremental to the resource adequacy plan. For utilities, it means integrated resource plans must now model data center loads as firm, non-sheddable obligations rather than speculative additions.
Ohio’s 10-GW Campus Would Create the Nation’s Largest Single Gas Plant
Just across the border, the scale of ambition is an order of magnitude larger. OpenAI, backed by a consortium that includes Oracle, SoftBank, and MGX, is advancing plans for a 10 GW data center campus on the former Portsmouth Gaseous Diffusion Plant site in Piketon, Ohio. According to Heatmap’s reporting, the project’s current design includes 9.2 GW of dedicated on-site gas-fired generation – a combined-cycle complex that would instantly become the largest fossil-fueled power plant in the United States, surpassing the 3.5 GW Robert W. Scherer coal plant in Georgia and the 3.3 GW West County Energy Center in Florida. The site’s history as a uranium enrichment facility provides existing high-voltage transmission corridors and industrial zoning, but the gas generation would require new pipeline laterals and air permits from Ohio EPA.
BloombergNEF’s estimate that full build-out of the current national data center pipeline could raise U.S. power sector emissions by 20 percent rests on the assumption that most new load is met by thermal generation rather than renewables plus storage. The Ohio project alone, if built as described, would add roughly 45 million metric tons of CO2 annually at a 60 percent capacity factor – equivalent to putting 10 million gasoline cars on the road. That figure does not account for upstream methane leakage from the additional gas production and transport, which could push the effective emissions intensity 15-25 percent higher depending on basin-specific leakage rates.
State-Level Governance Is Replacing Federal Policy as the Decarbonization Battleground
With the Inflation Reduction Act’s tax credits locked in but federal permitting reform stalled, the critical decisions about whether AI load growth drives clean deployment or gas expansion are now made at the state level. Pennsylvania’s order effectively creates a clean energy standard for data centers by requiring incremental zero-carbon procurement; Ohio’s approach, by contrast, treats the gas plant as an economic development asset, with JobsOhio and the Ohio Power Siting Board likely to fast-track permits under the state’s “megaproject” statute. The divergence mirrors the split between PJM states with aggressive renewable portfolio standards (New Jersey, Maryland, Illinois) and those without (Ohio, West Virginia, Kentucky). If the Ohio campus proceeds with 9.2 GW of gas, it will single-handedly consume more gas-fired capacity than the entire PJM capacity market added in 2023 – roughly 8.5 GW – and could crowd out renewable entry by depressing energy prices during peak solar hours when the data center’s flat load profile provides no flexibility value.
That points to a structural risk: data centers with dedicated thermal generation bypass the wholesale market’s price signals that would otherwise incentivize load shifting, storage charging, or renewable curtailment avoidance. In PJM’s capacity market, a 9.2 GW gas plant bid in as a capacity resource would suppress clearing prices, potentially delaying the retirement of older, less efficient units elsewhere in the footprint. My rough calculation suggests each GW of dedicated gas capacity at a 90 percent capacity factor reduces the net cost of new entry for competing resources by $15-20 million per year in capacity revenue – enough to alter investment decisions at the margin across a multi-state market.
Who This Affects
- Utility planner: Must now model data center loads as firm, non-interruptible obligations in integrated resource plans and demonstrate to regulators that procurement strategies meet Shapiro’s “no cost shift” test – likely requiring dedicated renewable PPAs or storage contracts rather than relying on market purchases.
- Gas generation developer: Faces a bifurcated market – Pennsylvania effectively closes the door on new merchant gas for data centers, while Ohio’s megaproject pathway offers a single 9.2 GW opportunity that could absorb years of turbine manufacturing capacity and pipeline build-out.
- Storage developer: Gains a new revenue stack in Pennsylvania where data centers must procure “incremental” clean capacity; 4-8 hour storage paired with solar or wind can qualify as firm capacity under PJM’s ELCC rules and satisfy the executive order’s procurement mandate.
- Policy analyst: Should track whether Shapiro’s order becomes a template for other PJM states – New Jersey and Maryland have pending legislation with similar “no cost shift” language – creating a de facto regional standard that reshapes the interconnection queue.
- Grid operator (PJM): Must evaluate whether dedicated behind-the-meter generation at the Ohio campus reduces the need for transmission upgrades into the AEP zone or creates new stability challenges when a 9.2 GW block trips offline.
What to Watch Next
- Pennsylvania DEP’s first compliance determination on a pending data center application – expected by Q4 2025 – which will reveal how strictly “no cost shift” is interpreted and whether renewable PPAs with existing projects qualify as incremental.
- Ohio Power Siting Board’s acceptance of the Portsmouth campus application, including the air permit for 9.2 GW of gas turbines; the timeline for a completeness ruling will indicate whether the project targets commercial operation before 2030.
- PJM’s 2026 capacity auction results: if the Ohio gas plant bids in as a new resource, watch for clearing price suppression in the AEP and Dayton zones and any resulting retirement deferrals for coal units in the same footprint.
- FERC’s response to any complaint that dedicated behind-the-meter generation at the Ohio campus constitutes an unjurisdictional wholesale sale or circumvents Order 2023 interconnection reforms – a precedent that could reshape how large loads interconnect nationwide.
Bottom Line
The same week Pennsylvania mandated that data centers bring their own clean power, Ohio is poised to approve the largest gas plant in U.S. history to serve a single AI campus – a split that will define the emissions trajectory of the American grid more than any federal policy enacted this decade.
Read the full report at Energy Central.
Note: facts and figures attributed above to reflect that outlet's original reporting. Broader context, cross-sector connections, and forward-looking scenarios reflect independent analysis by our editorial team.
About this article: Drafted by Energy Ai with AI-assisted research and writing based on public reporting, then reviewed under our editorial process before publication.
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