Massachusetts has become the newest state to crack down on data centers. Gov. Maura Healey signed an executive order this week that changes how large data centers get their power.
The order applies to any data center with peak demand over 25 megawatts. These facilities will now need to bring their own clean power instead of drawing straight from the shared grid.
Healey's preference is for companies to build clean power sources on-site. Wind, solar and similar sources would count toward this goal.
If a company cannot generate power on-site, it has other options. It can pay to build new clean generation near the facility. Or it can pay into a ratepayer protection fund instead.
What the Clean Energy Rule Requires
Massachusetts already has a clean energy standard for industry in general. That standard sets a rising percentage each year. By 2030, regulated industries must get at least 40% of their power from approved clean sources.
Data centers face a tougher bar. The governor's office confirmed that these facilities must meet 100% of their electricity demand with clean energy. That is more than double the standard applied to other sectors.
The executive order also addresses how data centers interact with local communities. Massachusetts is directing towns and cities to avoid signing non-disclosure agreements with developers.
These agreements have let some data center deals stay hidden from public view in other states. The new guidance pushes for more transparency during permitting and planning.
A Pause on Tax Breaks
Massachusetts is also pausing applications for a data center sales tax exemption. That exemption only took effect last month.
The pause gives state regulators time to put the new clean energy rules in place first. Officials have not said when the exemption program will reopen.
This move fits a wider pattern. Just a few years ago, states competed to attract data centers with tax breaks and incentives.
That has started to shift. Public concern over data centers has grown, especially around electricity costs and water use.
Massachusetts is the third state in three months to place new limits on data center development. In July, New York halted construction of new data centers at 50 megawatts or larger.
In August, Texas took a different approach. Gov. Greg Abbott ordered new data centers to submit to audits from the state's public utility commission and grid operator, ERCOT.
The tech industry has started responding to this shift in public opinion. A political action committee called Leading the Future is buying ads in battleground states ahead of the midterm elections.
The group is funded by tech figures including Marc Andreessen, Ben Horowitz and Greg Brockman. Its ads aim to shape voter views on AI and data center policy.
Healey's order marks one of the strictest state-level clean energy requirements for data centers so far. It requires full clean power coverage rather than a partial percentage used for other industries.
The Massachusetts governor's office issued an update confirming the 100% clean energy requirement applies specifically to data centers covered under the new order.
