Massachusetts Sets New Permitting, Energy Rules for Data Centers
A new executive order in Massachusetts imposes significant hurdles on data centers exceeding 25 MW, requiring them to meet clean energy standards, secure community benefit agreements, and address grid impacts.
Massachusetts Governor Maura Healey has issued Executive Order 658, creating a new regulatory and permitting framework for data centers with over 25 MW of peak electricity demand. The order is part of a growing trend by states to manage the significant environmental and energy-grid impacts of the booming data center industry.
For sophisticated counsel and their developer, investor, and technology clients, the order imposes new compliance burdens affecting site selection, project finance, and operational costs. It mandates that new projects conform with a state "Framework for Responsible Data Center Development," which includes requirements for community benefit agreements, greenhouse gas emissions evaluations, and water resource protection. Crucially, the order directs state agencies to ensure developers procure sufficient incremental clean electricity and to establish rate schedules so that grid upgrade costs are not borne by other ratepayers. This follows similar regulatory actions or moratoriums considered or enacted in states like Maine, New York, and Texas.
Developers and counsel should monitor the rollout of detailed regulations and guidance from several state agencies, which are due by December 31, 2026. These will dictate the practical viability and cost of future projects in the state.