BY Melissa Raymond, Associations Manager, Constellation Energy
As Pennsylvania’s digital economy continues to expand, local governments across the Commonwealth are increasingly affected by the rapid growth of data centers and other energy intensive facilities. These developments bring both opportunity and challenge for municipalities, as communities work to balance economic growth with reliable power delivery, infrastructure planning, and long term sustainability.
Data centers support everything from cloud computing and artificial intelligence to real time data processing. To operate, they require large amounts of uninterrupted electricity, placing new and sustained demands on local and regional energy infrastructure. For municipalities, this trend is reshaping how communities plan for growth, coordinate with utilities, and manage the impacts on residents and existing businesses.
Understanding the Impact of Data Center Growth on Local Communities
The expansion of data centers is accelerating changes already underway in Pennsylvania’s energy landscape. Utilities, independent system operators (ISOs), and energy providers are now facing a reality where significant and sustained load growth is no longer speculating. it is happening now and moving faster than many planners anticipated.
For municipal governments, this creates a new layer of complexity. Communities must consider how large new loads affect local substations, transmission infrastructure, emergency planning, zoning decisions, and long term economic development goals. Traditional grid planning approaches are being tested, and collaboration among municipalities, utilities, developers, and state agencies is becoming more critical than ever.
Some of the key grid related challenges affecting Pennsylvania local governments include:
- Demand forecasting: Understanding which proposed data center and industrial projects are likely to move forward is essential for effective land use planning and infrastructure coordination. Accurate forecasting helps communities avoid overburdening local systems or delaying projects due to insufficient capacity.
- Infrastructure constraints: long lead times for transformers, substations, and transmission upgrades can delay development and limit regional growth. These delays often affect municipal budgets, public safety planning, and community expectations.
- Capacity limitations and reliability: In areas where supply is already tight, including portions of the PJM region—municipalities must balance the introduction of new large loads while maintaining reliable electric service for residents, small businesses, and critical facilities such as hospitals, schools, and emergency services.
Exploring Challenges and Opportunities for Municipalities
A recent industry survey conducted by Constellation and Datacenter Dynamics underscores the growing recognition that data centers and large energy users must play a more active role in grid management. Eighty five percent of respondents agreed that greater collaboration is needed to effectively meet rising power demand, reflecting a broad industry shift toward shared responsibility and flexible solutions.
For Pennsylvania municipalities, this presents an opportunity to engage early with developers and utilities to discuss infrastructure needs, resiliency planning, and community impacts. Coordination at the local level can help ensure projects align with municipal goals while supporting regional grid reliability.
Optimizing the Grid to Meet Future Community Needs
Instead of relying solely on traditional expansion strategies—such as building new, large scale generation facilities, the energy sector is moving toward smarter and more flexible approaches. Grid optimization offers a faster and often more cost effective path to improving resilience while supporting sustainability objectives valued by many Pennsylvania communities.
These strategies focus on enhancing existing infrastructure and deploying targeted technologies so the grid can accommodate new demand without lengthy construction timelines or excessive costs. Approaches gaining traction include:
- Accelerated deployment: Infrastructure upgrades that can be implemented more quickly than new generation projects, helping communities respond to growth without prolonged disruption.
- System flexibility: The use of distributed energy resources—such as batteries or on site generation—to respond to changing grid conditions and improve reliability during peak demand or emergencies.
- Decarbonization support: Reducing reliance on higher emission fuels while maintaining dependable electric service, aligning with sustainability goals adopted by many Pennsylvania municipalities.
Constellation’s Commitment to Supporting Municipalities
As the energy market continues to evolve, Constellation Energy remains committed to helping municipalities achieve their energy goals. Whether your focus is on reducing emissions, managing energy costs, or adopting new technologies, Constellation offers tailored solutions to meet the unique needs of each municipality.
Article from the February 2026 Municipal Reporter | Pennsylvania Data Centers Edition
