Order requires local approval, benefit agreements for data centers
Massachusetts Governor Maura Healey signed an executive order requiring proposed data center projects to receive local approval and community benefits agreements before state permitting. This move is part of the administration's efforts to regulate data centers, following a halt on tax breaks and addressing concerns about energy, water, and environmental impact. The order also creates a Ratepayer Protection Fund for data centers unable to generate their own clean energy, while a specific data center in Lowell faces a lawsuit from residents over air quality and has seen an injunction against generator installations.
Massachusetts Governor Maura Healey signed an executive order on Tuesday, September 8, 2026, requiring proposed data center projects to obtain local approval and enter into community benefits agreements before they can proceed to state permitting. This action marks a continued effort by her administration to regulate data center development, following a previous halt on tax incentives earlier in the summer. The order also prohibits non-disclosure agreements between state agencies and data centers to ensure transparency. Governor Healey emphasized that the state would not approve a data center unless the host community first gives its consent.
The new framework dictates that data centers must procure or develop their own energy resources to avoid impacting ratepayers and the electric grid. They must also ensure adequate water and wastewater infrastructure and minimize air emissions. Projects with a peak electricity demand exceeding 25 megawatts will be held to these standards. The order establishes a "Ratepayer Protection Fund," requiring data centers unable to generate sufficient clean energy to pay into it, with funds directed back to ratepayers. The Massachusetts Department of Environmental Protection is tasked with creating a compliance payment mechanism by December 31 for facilities not meeting clean electricity targets.
These measures come as Massachusetts seeks to balance its ambition to be an AI leader with concerns over rising energy costs. While 15 other states are considering data center moratoriums, Governor Healey stated that Massachusetts is instead focusing on robust rules. The executive order follows legislative efforts, including a Senate amendment proposed by Sen. Vanna Howard of Lowell within an energy affordability bill, which imposed similar data center guardrails. Senator Howard cited issues from a controversial Lowell data center, including surging electric bills and pollution, as justification for these protections.
The Lowell data center, owned by Markley Group, has been the subject of a lawsuit filed by residents in April against the Massachusetts Department of Environmental Protection. Residents challenged the approval of an air quality plan that permitted the installation and operation of multiple diesel generators. A Middlesex Superior Court judge recently issued a temporary injunction, blocking the installation of four new generators while allowing existing ones to operate. Environmental groups, such as the Conservation Law Foundation, welcomed the executive order but called for additional action to address past impacts and ensure environmental justice in development decisions.