Data center builders in Massachusetts must obtain local government approval. Governor Maura Healey on September 8 signed an executive order that prohibits state-level building permits for data centers unless such projects are approved by the city or municipality where they are located.
These changes give municipalities across the Commonwealth the ability to quickly curb an industry that many already distrust.
Six municipalities have already banned or suspended these facilities
"If any community does not consent to hosting a data center, we are saying 'no'," Healey stated at a press conference at the State Capitol. According to the order, developers must first enter into community benefit agreements with their host municipalities.
These deals must meet state standards before the state permitting process can begin.
The order applies to projects with a maximum power demand exceeding 25 megawatts. To obtain permits, developers must comply with the administration's established data center rules.
The order also prohibits non-disclosure agreements between state agencies and data center service companies, which, according to Healey's office, aims to ensure the review process is open to the public.
In Shutesbury and Holyoke, these facilities are completely banned. Westfield has an approved moratorium. Easthampton, Northampton, and Greenfield are considering their own temporary bans.
Facilities over 25 megawatts are also required to generate their own power and ensure it aligns with state clean energy standards. Healey would prefer they generate it on-site.
If that's not feasible, they can fund the construction of new generating capacity nearby or contribute to a newly created Taxpayer Protection Fund.
Under the state's clean energy standards, only a small portion of electricity must come from approved sources like wind, solar, and hydropower, and this share will increase to at least 40% by 2030. However, the governor's office stated that data centers will face higher requirements.
They are called upon to use clean energy sources to meet 100% of their power needs.
"We cannot let data centers come in and take energy away from everyone else," she said.
The Massachusetts Department of Environmental Protection must develop an alternative compensation mechanism by December 31 for centers that do not meet the clean electricity usage standards.
These funds will go into the Taxpayer Protection Fund.
Lowell residents recorded electricity bill increases of over 50%
In June, Healey halted consideration of applications for a 20-year sales and use tax exemption for qualifying data centers—a benefit she was quick to move away from.
"The sales tax exemption was not my idea," she told reporters, noting it was part of an economic development package she signed in 2024.
Many local residents express dissatisfaction with the situation in Lowell. A bill by State Senator Vanna Howard, S 3166, contains provisions similar to those proposed by Healey.
Howard told colleagues that some residents living near the Markley Group facility in Lowell saw their electricity bills increase by more than 50%, exhaust fumes entered bedrooms, and noise disrupted sleep.
In April, Lowell residents sued MassDEP over an air quality improvement plan that involved installing generators at the site, and recently a Middlesex County Superior Court judge blocked the installation of four generators.
Massachusetts has become the third state in the last three months to tighten controls. Texas Governor Greg Abbott in August took action requiring new facilities to undergo audits by the state utility regulator and grid operator ERCOT.
In July, New York state paused construction of data centers rated at 50 megawatts or more. According to the National Conference of State Legislatures, 15 states are considering a moratorium.
Modern AI data centers can consume a gigawatt or more, and in some parts of the US, grid connection can take seven years or longer, forcing operators to turn to on-site generation using diesel and gas, increasing both costs and emissions. It is this burden, Healey said, that her order is meant to protect consumers from.
Marc Andreessen, Ben Horowitz, and Greg Brockman support the super PAC Leading the Future, which advocates for AI use and is running ads targeting voters in key states ahead of the midterm elections.
