Massachusetts Imposes Clean Energy Rules on Large Data Centers
Massachusetts Governor Maura Healey signed Executive Order 658, mandating that new data centers over 25 MW must use clean energy or contribute to a Ratepayer Protection Fund. This, combined with a previous freeze on tax incentives, is expected to increase compliance costs, delay project timelines, and push for greater transparency for data center developments in the state.
Massachusetts Governor Maura Healey has enacted Executive Order 658, introducing new clean energy and transparency standards for data center projects exceeding 25 megawatts. Under this mandate, developers must power their facilities with independent clean energy sources or contribute to a newly established Ratepayer Protection Fund, aiming to balance energy infrastructure expansion with state goals for grid reliability and affordability.
These requirements follow an earlier administrative decision in June 2026, which paused applications for state-level data center sales and use tax exemptions. The combined effect of these policies is an increase in regulatory hurdles for new data center entrants, alongside a push for greater transparency by restricting non-disclosure agreements between state agencies and developers and requiring community benefit agreements.
For investors and tech companies, these policy changes signify a shift in the operating environment, likely leading to increased capital spending and longer permitting timelines due to the need for clean power investment and local community approval. Massachusetts' actions reflect a broader national trend where states, including Texas and New York, are re-evaluating the impact of data centers on local power grids amid rising demand from AI and cloud computing.