Massachusetts has enacted new regulations requiring data centers with a peak demand exceeding 25 megawatts to either generate their own clean energy or contribute to a ratepayer protection fund. This mandate, issued by Governor Maura Healey, marks a significant shift in the state’s approach to data center development.
In a departure from previous incentives aimed at attracting tech companies, the new executive order reflects growing public concern over the environmental impact of data centers. Developers must now ensure that their energy sources comply with state clean energy standards, with a strong preference for on-site generation.
Should developers fail to produce clean energy on-site, they are obligated to fund nearby clean energy generation projects or contribute financially to the protection fund. The state’s clean energy standard requires that by 2030, at least 40% of electricity must come from approved renewable sources, and data centers will need to meet 100% of their electricity demand through clean energy.
To facilitate the implementation of these new rules, Governor Healey has paused applications for a data center sales tax exemption that was recently introduced. Additionally, the order advises local communities against signing non-disclosure agreements that could hinder transparency.
This move positions Massachusetts as the third state in recent months to impose stricter regulations on data center operations, following similar actions in Texas and New York. Texas Governor Greg Abbott recently mandated audits for new data centers, while New York halted construction on larger facilities.
As public sentiment increasingly turns against data centers, the tech industry is beginning to respond. Pro-AI super PAC Leading the Future, backed by notable figures like Marc Andreessen and Ben Horowitz, is launching campaigns to influence voters in key states ahead of the midterm elections.
These developments underscore a growing trend among states to prioritize environmental concerns in the tech sector, reflecting a broader shift in regulatory attitudes.