Data Center Site Selection in Pennsylvania

Pennsylvania is one of the country’s largest power producers. It generated more than 230 million MWh in 2020, behind only Texas and Florida, and delivered nearly 78 million MWh to neighboring states, more than any other state.¹ Natural gas overtook nuclear as the leading source in 2019 and supplied about 52% of generation in 2020, up from 15% in 2010.¹ Nuclear supplied 33%, the second-highest nuclear output of any state after Illinois.¹

Fuel is close at hand. Pennsylvania is the second-largest natural gas producer after Texas, with 7.5 trillion cubic feet in 2022, and it has 49 underground gas storage sites, more than any other state.¹⁰ That combination of surplus generation, in-state gas and an established transmission network is why developers look at Pennsylvania for both grid-served campuses and on-site generation.

The whole state is in PJM, so wholesale capacity costs and PJM’s interconnection rules apply everywhere. Our PJM regional guide covers the market; this guide covers what is specific to Pennsylvania.

Pennsylvania’s grid is delivered by electric distribution companies (EDCs), chiefly PPL Electric in the east and northeast, PECO around Philadelphia, FirstEnergy’s operating companies across much of the center and west, and Duquesne Light in Pittsburgh. Customers can buy energy from a licensed retail supplier while the EDC delivers it, a structure the Susquehanna deal relies on.⁴ For a site screen, the EDC determines the interconnection process, the upgrade costs and, increasingly, the large-load contract terms.

On May 13, 2026, the Public Utility Commission issued a final order establishing a model tariff framework for large-load customers, following an April 30 vote.² Its main elements:

• It applies to customers above 50 MW individually or 100 MW in aggregate, with no reduction for behind-the-meter generation.²
• Large-load customers should bear the cost of upgrades that would not have been needed “but for” their request.²
• Customers that terminate before the utility recovers its investment would pay exit fees, and large loads would contribute to universal service programs.²
• Existing large-load customers are grandfathered under current terms but may opt in.²

The model is nonbinding. Each EDC must file its own tariff, and the commission will decide key terms case by case in each utility’s docket.² PPL already has terms in place: the commission voted 5–0 to approve a PPL rate settlement that creates a large-load class with service commitments of at least 10 years and minimum usage requirements, plus a non-bypassable charge expected to direct $11 million a year to low-income assistance starting in 2027.⁶ Check whether PECO, FirstEnergy and Duquesne have filed. Our guide to large-load tariffs explains how minimum bills and exit fees work.

PPL Electric’s service area in eastern and central Pennsylvania has become one of the busiest large-load territories in PJM. PPL reported 31.8 GW of data center projects in advanced stages of planning in the second quarter of 2026, with more than 11 GW under signed electric service agreements and more than 6.5 GW under construction.³

A pipeline that large changes the question for a new request. The issue is less whether PPL wants the load than where it would fall in the study sequence and what transmission upgrades it would trigger under the “but for” principle.² Ask for the study queue position in writing, and see our guides to the large-load interconnection process and transmission upgrade cost allocation.

The Talen–Amazon arrangement at the Susquehanna nuclear plant in Luzerne County is one of the most closely watched tests of colocating a data center with a power plant. In November 2024 FERC, by a 2–1 vote, rejected an amended interconnection service agreement that would have raised the co-located load served behind the meter from 300 MW to 480 MW, finding PJM had not justified its nonstandard terms.⁷ FERC denied rehearing on April 10, 2025, and Susquehanna appealed to the Fifth Circuit.¹¹

On June 11, 2025, Talen announced a restructured deal. The co-located behind-the-meter model became a grid-connected, front-of-the-meter retail arrangement: Talen acts as Amazon’s licensed retail supplier, PPL delivers the power, and the output of the two-unit, 2.5 GW plant flows into PJM.⁴ The contract covers 1,920 MW through 2042, worth about $18 billion at full quantity.⁴

The rules have since moved. On December 18, 2025, FERC found PJM’s tariff unjust and unreasonable because it lacked clear rates, terms and conditions for co-located load, and directed PJM to offer new transmission services priced on a co-located load’s net withdrawals from the grid, with compliance filings due in early 2026.¹² How PJM implements that order will decide whether future Pennsylvania colocation deals can avoid full network service.

The lesson for site selection is that proximity to a nuclear plant does not by itself mean cheaper or faster power. Moving from behind the meter to front of the meter put the load back on the grid, with delivery charges and the utility’s upgrades. Our guides to behind-the-meter versus front-of-the-meter service and nuclear siting cover the trade-offs.

Pennsylvania’s industrial history has left large sites with transmission, water and heavy-industrial zoning already in place. The Homer City project in Indiana County is the largest example: a former coal plant site of more than 3,200 acres planned around a roughly 4.5 GW gas-fired plant.⁵ The developers kept the legacy plant’s transmission links to PJM and NYISO, its substations and its water access, and ordered seven GE Vernova 7HA.02 turbines, with Kiewit as the construction contractor.¹³

Even with that head start, the schedule moved. The 2025 announcement targeted power by 2027,¹³ while a March 2026 update put first generation in early 2028 and completion by 2029, with about 3,700 MW earmarked for data centers and 700–800 MW for the grid.¹⁴ Vertical construction began with a “first steel” milestone in April 2026.⁵

Amazon’s Pennsylvania plan uses both models. In June 2025 Governor Josh Shapiro announced at least $20 billion of Amazon investment, starting with a campus at the Keystone Trade Center in Falls Township, Bucks County, once the site of one of the world’s largest steel mills, and one beside the Susquehanna plant in Salem Township.¹⁵ Our guides to repurposing industrial and power plant sites and brownfield liability protections cover what to check on land like this.

Every Pennsylvania load pays for PJM capacity, and that price has now hit its cap in three straight auctions. The 2028/2029 Base Residual Auction, announced July 14, 2026, cleared at the $325 per MW-day cap; PJM estimated the price would have been $554.72 without the cap and floor, which were extended to cover four auctions through 2029/2030.¹⁶ Cleared capacity fell 6,831 MW short of the reliability requirement.¹⁶

Two site-level consequences follow. Capacity cost is a large, volatile line in the power budget that a buyer should model for several delivery years, and the shortfall strengthens the case for flexible operation or on-site generation that can reduce peak demand. Our guide to PJM capacity prices covers the auction mechanics and the price collar.

Act 25 of 2021 created Pennsylvania’s sales tax exemption program for data centers. Since January 1, 2022, computer data center equipment sold to or used in a certified data center by an owner, operator or qualified tenant holding a Department of Revenue certificate is exempt from sales and use tax.⁸ It replaced an earlier refund model.⁸

The county population split matters in site comparisons, because a rural county lowers both the investment and job thresholds.⁹ Confirm eligibility with a tax advisor, and compare terms with other states in our guide to sales tax exemptions by state.

1. 01Identify the EDC and whether it has filed a large-load tariff under the PUC’s model framework.²
2. 02In PPL territory, ask where the request sits in a 31.8 GW advanced-stage pipeline.³
3. 03Model minimum usage, contract term and exit fees against a realistic ramp schedule.⁶
4. 04For colocation, check where PJM’s compliance with FERC’s December 2025 co-location order stands before assuming anything other than front-of-the-meter delivery.¹²⁴
5. 05For former plant sites, verify which transmission, substation and water rights actually transfer.¹³
6. 06Model PJM capacity costs at or near the $325 per MW-day cap, and test what happens after the collar ends.¹⁶
7. 07Check the county population tier for the equipment exemption.⁹

Written answers from the EDC, the county and tax counsel remain the real test, but these steps show quickly whether a parcel deserves that work. Our due diligence checklist covers the rest, our Ohio guide covers a neighboring PJM state, and you can get a site reviewed if you want an outside screen of a Pennsylvania parcel.