Massachusetts hits data centers with new clean power rules
Massachusetts Gov. Maura Healey issued an executive order requiring new data centers with peak demand above 25 megawatts to supply their own electricity and ensure it meets the state's clean energy standards, or else pay into a ratepayer protection fund. The order pauses a recent data center sales tax exemption and directs communities to avoid non-disclosure agreements while regulators work out implementation details.
Why It Matters
The move marks another turn by state governments to constrain data center expansion amid local opposition and concerns about grid impacts and clean-energy commitments. By demanding 100% clean energy for large facilities, Massachusetts raises the bar for how such projects will be powered and financed.
Key Facts
- Governor: Maura Healey
- Size threshold: data centers larger than 25 megawatts of peak demand
- Clean power requirement: must meet 100% of electricity demand with clean energy generation (clarified by governor's office)
- Options if not onsite: fund construction of new generation nearby or pay into a ratepayer protection fund
- Other directives: communities should avoid signing non-disclosure agreements
Massachusetts has ordered that data centers with peak demand above 25 megawatts must provide their own electricity and ensure that supply complies with the state's clean energy standard. The executive order from Gov. Maura Healey signals a preference for onsite clean generation, but allows developers to instead finance nearby new generation or contribute to a ratepayer protection fund if they cannot meet that preference.
The governor's office clarified that the mandate requires covered facilities to match 100% of their electricity demand with clean energy generation. To give state regulators time to put the new requirements into practice, Healey temporarily paused applications for a recently enacted data center sales tax exemption.
The order also counsels localities to avoid signing non-disclosure agreements with developers, a move intended to increase transparency in negotiations over proposed facilities. Officials framed the changes as an effort to protect ratepayers and align large electricity users with the state's legal clean energy trajectory.
Massachusetts is the third state in roughly as many months to adopt new limits on data center development. In August, Texas officials said new data centers must submit to audits by the public utility commission and ERCOT, and in July New York halted construction of data centers of 50 megawatts or larger. The industry has begun pushing back politically: the pro-AI super PAC Leading the Future, financed by figures including Marc Andreessen, Ben Horowitz and Greg Brockman, has bought ads aimed at swaying voters in battleground states ahead of midterm elections.
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