Massachusetts Governor Maura Healey has issued an executive order that requires data centers with peak demand above 25 megawatts to supply their own electricity and to ensure that supply meets the state's clean energy standards. The order expresses a preference for onsite renewable generation; if onsite generation is not provided, developers must fund new nearby generation or contribute to a ratepayer protection fund.
Details of the new requirement
- Threshold: the rule applies to data centers with peak demand greater than 25 megawatts.
- Clean energy: the governor's office clarified that the order requires data centers to meet 100% of their electricity demand with clean energy generation.
- Preference and alternatives: Healey prefers onsite generation, but allows developers to instead finance construction of new generation close to the facility or to pay into a fund for consumer protection.
Massachusetts law already defines a clean energy standard that phases in increasing shares of approved resources such as wind, solar, and hydro (for example, those sources must supply at least 40% of electricity by 2030). The executive order, however, imposes a stricter condition on covered data centers by requiring full coverage of their demand with clean energy.
Additional measures and temporary steps
The executive order also directs communities to avoid signing non-disclosure agreements with developers where possible. To give regulators time to implement the new rules, the governor has paused accepting applications for a data center sales tax exemption that went into effect last month.
Broader context: other states tightening rules
With this action, Massachusetts becomes the third state in recent months to limit data center development. In August 2024, Texas Governor Greg Abbott announced that all new data centers would be subject to audits by the public utility commission and the grid operator ERCOT. In July 2024, New York's governor halted construction of new data centers of 50 megawatts or larger.
Industry response
As public sentiment shifts against large data centers, portions of the tech sector have begun to push back. The pro-AI super PAC Leading the Future — funded by Marc Andreessen, Ben Horowitz, and Greg Brockman — is buying advertisements aimed at influencing voters in battleground states ahead of midterm elections.
Why it matters
The order addresses local concerns about energy use and the environmental footprint of large data centers while responding to political pressure to act. Its ultimate effect will depend on how often developers choose onsite renewables, how much new nearby generation is financed, and the size of contributions into the ratepayer protection fund. Regulators will work out implementation details and enforcement procedures in the coming months.
