Lessons from Amazon’s $20B investment in Pennsylvania

By EPN Staff

With its strong energy production and abundant generation capabilities, Pennsylvania is set to host an influx of energy-hungry data center development, led by Amazon’s recently announced $20 billion-plus investment plans at sites across the commonwealth.

The effort is the largest private investment in state history “by a factor of three,” Gov. Josh Shapiro said.

Why it matters

The announcement is part of a broader data center blitz; just a few days before the Pennsylvania announcement, Amazon had announced a $10 billion investment in rural North Carolina.

The growth is expected to significantly boost energy demand in the United States, and Pennsylvania seems well positioned: It exports more of its electricity than any other state in the country.

Amazon’s planned facility in Falls Township, northeast of Philadelphia, expects to plug into Pennsylvania’s normal electric grid, according to the Associated Press. Its other planned data center, in Salem Township, east of Pittsburgh, would be powered directly by the nearby Susquehanna nuclear reactor – if federal regulators approve.

The company said it would create 1,250 new jobs, plus the initial construction jobs to open the centers and thousands of other jobs in the company’s supply chain supported by the facilities. Other sites beyond the initial two haven't been decided yet, the company said.

The reactor would provide some 40% of the plant’s output – enough to power more than a half-million homes – to Amazon, the AP reported.

This “behind the meter” connection has been held up by the Federal Energy Regulatory Commission and represents a test case as large energy users look for direct arrangements with power generators.

The bigger picture

Power providers and policymakers around the country are grappling over who will pay for the electricity that artificial intelligence systems need.

Meta, Facebook's parent company, late last year announced its own $10 billion data center in Louisiana, which amounts to one of the largest private investments in that state's history. Powering it will take some $6 billion in infrastructure upgrades, leaving questions about how much of the cost Meta will cover and what other customers will pay for.

Amazon said in May that it has invested $156 billion in U.S. data center infrastructure since 2011. The company’s biggest investment has been in Virginia, totaling more than $91.5 billion, according to Amazon’s numbers. “In 2024 alone, AWS paid $542.9 million in property taxes and fees in Virginia,” the company said.

Shapiro told CNBC that Pennsylvania “did not provide any cash incentives to Amazon here, at all” to entice the company’s new investments, though it has promised $10 million to pay for employee training programs at community colleges and other training programs.

Additional details

Since 2010, Amazon has invested $26 billion in Pennsylvania, supporting 27,000 full and part-time jobs, according to the company.

Those are spread across 23 fulfillment and sorting centers and 20 last-mile delivery stations, the company said.

^{Article Image: "Susquehanna Steam Electric Station from Council Cup” by Jakec, CC BY-SA 4.0, via Wikimedia Commons}